Is the Bear Market Rally Over?

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  • A key indicator suggests that Bitcoin’s bear market rally is over
  • The MACD flipped red last week having been green for 10 months
  • This has historically brought on a months-long period of decline

A key Bitcoin indicator is suggesting that Bitcoin’s bear market rally may be over, following a four-month rise that has seen the price more than double. The weekly MACD indicator is flashing red for the first time since August 2022 in a sign that upward momentum may be exhausted and a months-long deflation may take place prior to the next bull market. This would reflect a historical trend and may present a chance to pick up more crypto in the coming months.

History Repeating?

The MACD can indicate a potential shift in medium-term momentum, reflecting price action over two timeframes. As we can see from the weekly MACD, things don’t look too clever for Bitcoin:


History tells us that when the MACD flips red after a prolonged period of green, trouble is on the way: prior crosses also took place in January 2018, August 2019, and November 2021, with Bitcoin entering a slump on every occasion, a year-long slump in the case of 2018. What’s made worse is the upward trend has been going for longer than on any previous occasion, suggesting that if it isn’t exhausted already it will be very soon.

Other indicators also suggest that the second half of 2023 will not be particularly pleasant. The Bitcoin Cloud indicator is echoing late 2019 when the bubble burst following a bounce from the bear market bottom:


If Bitcoin does spend the next few months in a downtrend, where can we expect it to end up? Looking at the weekly chart, the area of $20,000 is a very strong possibility for a second bottom, given that $15,500 only got tapped following the collapse of FTX:


If history does repeat itself and Bitcoin spends the next 6-12 months gently letting the air back out of its tires, we can expect some chopping around $20,000-$24,000 before gearing up for the next bull run later in 2024.

Just keep your powder dry, folks.