Is Bitcoin's $70K Breakout at Risk? The Impact of Trump's Trade War Rhetoric Explained!

The Latest on Bitcoin's Market Indicators

A momentum indicator that previously signaled Bitcoin's (BTC) price surge post-election has now turned bearish. This shift coincides with President Donald Trump's escalating tariff rhetoric, which poses potential risks to market stability. However, there’s no immediate cause for alarm.

Understanding the MACD Indicator

The Moving Average Convergence Divergence (MACD) histogram, an essential tool for analyzing trend strength, has crossed below zero on Bitcoin's weekly chart. This negative reading suggests a bearish shift in momentum. In contrast, crossovers above zero indicate a bullish trend. The MACD turned positive in mid-October, reinforcing expectations for a rally towards $100,000.

Current Market Dynamics

Despite the bearish MACD signal, BTC remains within a price range of $90K to $100K, tightening recently between $95K and $100K. This directionless trading lessens the significance of the MACD’s bearish crossover. It’s crucial to remember that indicators like MACD derive from price movements, not the other way around.

Macro Factors Affecting Bitcoin's Price

Several macroeconomic factors may introduce volatility, particularly Trump's tariff announcements. If these tariffs materialize, they could elevate bond yields and depress risk assets. Trump has indicated plans for 25% tariffs on steel and aluminum imports, with more duties to follow.

Recent consumer sentiment surveys show that these tariff threats are negatively impacting expectations about inflation, which rose from 3.3% to 4.3% in February. This increase in inflation expectations could hinder the Federal Reserve's ability to cut rates rapidly, maintaining a cautious stance on economic growth.

The upcoming U.S. CPI data release on February 12 will be pivotal in shaping market sentiment moving forward.