Is Bitcoin Headed for a Major Crash? Market Indicator Signals Possible 70% Price Plunge
Bitcoin’s recent price trajectory has been anything but stable. Last week alone, it spiked past the $113,000 mark mid-week, only to tumble back and settle near $107,000 shortly after. While the price has since stabilized slightly, analysts warn that the calm may be deceptive. A key technical indicator has turned bearish, raising alarms over a potential dramatic plunge — possibly as steep as 70%.
A troubling shift in a major momentum indicator — the Moving Average Convergence Divergence (MACD) — is at the heart of this bearish forecast. The MACD is widely used by traders to assess momentum and potential trend reversals. When the MACD line crosses above the signal line, it’s considered bullish, signaling potential upward momentum. However, when the MACD line dips below the signal line, it’s a red flag for a potential bearish reversal.
According to crypto analyst Ali Martinez, the MACD has just made a bearish crossover on the monthly timeframe — a rare move that has historically preceded significant market downturns. In fact, during the past four times the MACD flipped bearish like this, Bitcoin lost, on average, about 70% of its market value.
Historical data backs this concern. The last time Bitcoin’s monthly MACD turned bearish was in September 2021. What followed was a brutal market correction, dragging the price of BTC from its highs down to nearly $16,000 by November 2022 — a decline of over 70%.
If this pattern repeats, Bitcoin could be on the verge of another major correction. From its current level — hovering around $110,540 — a 70% drop would send its price plunging to approximately $33,000, or potentially even lower.
While short-term price action has shown some resilience, the long-term indicators suggest that caution is warranted. The MACD isn’t a perfect predictor, but its predictive power on higher timeframes has proven reliable in past market cycles. If history repeats itself, Bitcoin investors could be facing months of downward pressure.
Market sentiment also appears to be shifting. Although the overall cryptocurrency market cap remains relatively high, there are signs of capital rotation away from Bitcoin into alternative assets. This often occurs during periods of uncertainty or when investors anticipate better returns elsewhere.
Additionally, macroeconomic factors are adding to the tension. With central banks around the world continuing to adjust interest rates and inflationary pressures still lingering, risk assets like Bitcoin remain vulnerable. A tightening monetary environment often reduces liquidity, which can amplify price declines in speculative markets.
That said, not all analysts are convinced of an imminent crash. Some argue that the Bitcoin market has matured and that institutional interest may provide a cushion against the kind of deep corrections seen in the past. Others believe that the upcoming Bitcoin halving event, expected in 2024, could serve as a catalyst for renewed bullish momentum.
Still, the MACD signal cannot be ignored. In technical analysis, monthly timeframe indicators carry significant weight, as they represent longer-term trends and investor sentiment. A bearish crossover at this level is not just noise — it’s a signal that the tide might be turning.
Investors and traders should also consider the broader market structure. Bitcoin has failed to set new highs in recent months, instead forming a series of lower highs, indicating weakening buying pressure. If support at current levels breaks, it could trigger a cascade of sell-offs as stop-loss orders are hit and leveraged positions unwind.
Moreover, the psychological impact of a large correction could shake retail confidence. After a prolonged bull market, a sudden reversal often catches latecomers off guard, leading to panic selling and further exacerbating price declines.
While no one can predict the future with certainty, the convergence of technical indicators, historical patterns, and macroeconomic headwinds suggests a cautious approach. Traders may look to hedge their positions, reduce exposure, or wait for clearer confirmation before making large moves.
In conclusion, Bitcoin’s near-term outlook is clouded by growing bearish signals, most notably the MACD crossover on the monthly chart. While this doesn’t guarantee a 70% crash, it does highlight significant downside risk. Whether this marks the beginning of a prolonged bear phase or a temporary correction remains to be seen, but one thing is clear: the crypto market is entering a critical phase.
As always, investors should conduct thorough research, manage risk carefully, and avoid making decisions based solely on emotion or speculation. The coming weeks and months could be pivotal in determining whether Bitcoin holds its ground — or succumbs to another historic downturn.