The Bitcoin monthly MACD has been red since 2022. Deep bear markets were predicted by past signals. Japan yield spike triggers selloff, liquidates $564M in longs.
The monthly momentum indicator of Bitcoin has gone bearish. In November, the moving average convergence divergence histogram recorded its initial red bar at a negative value. During the month, BTC declined by more than 17%.
The shift is a technical trend that was observed in 2022, 2018, and 2014. All of them were followed by prolonged bear markets. The cryptocurrency dropped to about 20,000, following the January 2022 signal, which was approximately 70,000.
Liquidity Wipeout Sets Stage for Squeeze
The previous 24 hours were brutal for leveraged traders. Liquidation of long positions totalled in excess of $564.7 million according to CryptosR_Us on X. Coinglass data shows there is a lot of liquidity above the existing prices.
Source: CryptosR_Us X.
The analyst proposes that markets track liquidity flows. “Next move: Up!” CryptosR_Us tweeted. The short squeeze could be gigantic as bearish positioning goes to the extreme.
Bitcoin is trading at an approximate price of $85,136. The bearish crossover in the MACD serves as a sign that the bull run, which started at $20,000 level, is over. Bears have usurped momentum.
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Japan Yield Shock Triggers Sunday Massacre
Timing was disastrous to crypto holders overnight. The collapse in Bitcoin was accompanied by a 2-year yield in Japan going above 1 percent. This is more likely to cause tightening of Bank of Japan policies, as TedPillows explained on X.
Source: TedPillows explained on X.
Increasing funding expenses compel the repricing of risks globally. First to respond are high-beta assets such as Bitcoin. The sell-off occurred on Sunday midnight, the most illiquid time of the week.
Order books were thin. Market Makers worked at low volume. U.S. ETF flows were absent. One macro trigger pushed Bitcoin through several levels of support.
Exchange-wide stops. Leveraged positions are forcefully unwound. Liquidations trickled down order books. TedPillows described it as pure repricing of risk.
Futures rates on gold and silver rose as Bitcoin dropped. Safe-haven assets received inflows as the carry trade issues intensified.
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Historical Patterns Point to Further Weakness
The bearish cross-over MACD per month is important. All large cycles since 2012 had extended troughs after this indicator. The indicator compares changes in momentum between the short-term and long-term.
The negative value in November validates the reversal of a bullish to bearish trend. History does not presuppose the future. But the present macro conditions favour the bearish side.
Japan is experiencing increasing fiscal pressure. Federal Reserve rate cut talks have not deterred the dollar index. The level of treasury yields is high. Spot Bitcoin ETFs have recently recorded outflows.
The risk of downside volatility is increased for traders. At the trendline between higher lows of 2023-2024, the first support is close to $84,500. A break exposes April’s $74,500 low. The next level is the 2021 high of approximately $70,000.
Ether confirmed a death cross pattern. The 50-day simple moving average fell below the 200-day SMA. This is an indication of short-term trends that are less than the long-term trends. The trend may transform into bear markets.
The death cross vibrates disastrously. It has a poor track record in terms of being a reliable independent indicator of Ethereum. Together with the MACD signal of Bitcoin, more generalised crypto weakness is probable.
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