Bitcoin's Key Momentum Indicator Shifts Direction with Donald Trump's Trade War Rhetoric! Here are the Details

A critical Bitcoin (BTC) momentum indicator, which previously signaled a break towards $70,000, declined in conjunction with former US President Donald Trump's escalating trade war rhetoric.

Bitcoin's Key Momentum Indicator Turns Bearish Amidst Trump's Trade War Rhetoric

While the change in the indicator may not be a cause for concern, macroeconomic factors may cause volatility in the market in the coming weeks.

MACD Turned Negative, But Bitcoin Maintains Key Range

The Moving Average Convergence Divergence (MACD) histogram, which is a widely used technical analysis tool to measure trend strength and changes, has turned negative on Bitcoin's weekly chart.

MACD is obtained by subtracting the 12-week average price of BTC from the 26-week average, and a signal line is calculated as the nine-week moving average of MACD. When the MACD histogram rises above zero, it indicates bullish momentum, and when it falls below zero, it indicates bearish pressure.

Bitcoin's MACD first turned positive in mid-October, signaling a rally towards $100,000. However, the recent crossover below zero indicates a diminishing momentum.

However, BTC continues to remain in a wider trading range of 90,000 to 100,000 dollars, and the recent price action is consolidating between 95,000 and 100,000 dollars. The lack of a clear breakout is reducing the immediate impact of the bearish MACD signal.

While technical indicators alone do not determine price movements, macroeconomic conditions can increase downward risks for BTC. At the forefront is the new customs tariff move by Trump, which is already starting to affect market expectations.

• Trump announced that he plans to impose a 25% customs duty on all steel and aluminum imports, and is expected to impose additional taxes on other metals later this week.
• Trump also hinted at higher customs duties on European Union goods, which UBS analysts warned could further disrupt global trade. The University of Michigan's consumer sentiment survey showed that inflation expectations, which were 3.3% in January, rose to 4.3% in February, reaching the highest level since November 2023.