Bitcoin Indicator That Signaled $70K Breakout Turns Bearish as Trump's Trade War Rhetoric Grows

Bitcoin Indicator That Signaled $70K Breakout Turns Bearish as Trump's Trade War Rhetoric Grows

Bitcoin Faces Bearish Signal Amid Trump’s Tariff Rhetoric and Inflation Concerns

Bitcoin (BTC) is facing renewed bearish momentum on a key technical indicator, but analysts suggest there’s no immediate cause for panic. However, former President Donald Trump’s tariff rhetoric and rising inflation expectations could inject volatility into the market.

MACD Indicator Turns Negative but Lacks Confirmation

Bitcoin’s Moving Average Convergence Divergence (MACD) histogram, a widely used momentum indicator, has turned negative on the weekly chart. Historically, this shift signals a weakening trend, but BTC’s price action has yet to confirm the bearish outlook.

Currently, BTC is trading within a broad range of $90,000 to $100,000, with recent movements tightening between $95,000 and $100,000. Since technical indicators derive their signals from price action, the lack of a significant price drop diminishes the bearish MACD crossover’s immediate impact.

Back in October 2024, the MACD turned positive, coinciding with BTC breaking out of a multi-month trading range and fueling the rally toward $100,000. The current situation lacks a similar decisive move, meaning traders are closely watching for confirmation before making major market decisions.

Trump’s Tariff Plans and Inflation Expectations Add Pressure

Beyond technical indicators, macroeconomic factors are emerging as potential market-moving forces. Trump recently announced his intention to impose 25% tariffs on all steel and aluminum imports, alongside additional duties on other metal goods. Moreover, he has hinted at broader tariffs on European imports, which could disrupt global trade.

The impact of these tariffs is already being reflected in inflation expectations. The University of Michigan’s consumer sentiment survey revealed that one-year inflation expectations surged to 4.3% in February, up from 3.3% in January, marking the highest level since November 2023.

Higher inflation expectations could force the Federal Reserve to maintain its restrictive monetary policy for longer, delaying anticipated interest rate cuts. Market analysts have noted that 2-year inflation swaps have reached 2.72%, indicating that traders are pricing in potential risks related to tariffs and inflation persistence.

What’s Next for Bitcoin?

While BTC remains stable for now, a break below the $90,000 support level could validate the MACD’s bearish shift and confirm a downside trend. Investors are keeping a close watch on U.S. inflation data (CPI report) set for release this month, as it will provide further clarity on the Fed’s potential policy moves.

For now, Bitcoin’s price action remains key. If BTC manages to stay above key support levels, the bearish signal on the MACD might not translate into a significant downturn. However, if macroeconomic uncertainties escalate, downside volatility could increase.