- Bitcoin could fall to the July 2 low of $9,614 and may break lower in the short-term, as the widely tracked MACD (moving average convergence divergence) histogram on the three-day chart has turned bearish for the first time since December.
- Buyer exhaustion above $12,000, as seen on the weekly chart, also supports the case for a stronger correction.
- Dips below $9,000 could be short-lived, courtesy of an impending golden crossover on the three-day chart.
- A weekly close above $12,000 would indicate a resumption of the rally from April lows near $4,000.
A widely tracked bitcoin (BTC) price indicator has turned bearish for the first time in seven months.
The moving average convergence divergence (MACD) histogram – an indicator used to identify trend changes and the momentum of the bearish or bullish movement – has dropped below zero on the three-day chart for the first time since Dec. 21, 2018.
The histogram crossing below zero is considered a sign of bullish-to-bearish trend change, while a move above zero is taken as confirmation of the bull reversal.
Some observers may argue that the MACD is based on moving averages and tends to lag prices. While that is true, crossovers on the three-day chart MACD have proved to be reliable indicators of changes in trends in the past, as seen in the chart below.
As seen above, the MACD’s drop below zero in the first week of January 2018 marked the beginning of the bear market. BTC’s price then fell from $17,000 to $6,000 in the four weeks to Feb. 6.
The same year,