Bitcoin's Bearish Momentum Looms as Key Indicator Nears Crossover

Bitcoin's bullish momentum has been gradually eroding since it failed to maintain its position above the $100,000 psychological barrier earlier this year. The cryptocurrency has experienced a significant pullback over the past two months, with its price fluctuating between $75,000 and $79,000 in April. This decline has raised concerns about the bullish outlook for Bitcoin, as the crypto sector seeks technical clarity amidst growing pressure in traditional markets, particularly in equities.

Crypto analyst Tony Severino has identified a key technical development that could potentially invalidate the current bearish momentum. According to Severino, the most significant chart development is the impending bearish crossover on Bitcoin’s 1-month LMACD indicator. The LMACD, which measures market momentum on a logarithmic scale, currently shows the blue line approaching a crossover beneath the orange signal line. This type of crossover is typically seen as a crucial bearish confirmation and has coincided with broader market weakness, including declines in traditional indices like the S&P 500 and Nasdaq.

Although the crossover has not yet been confirmed by a monthly close, its presence at the start of April has raised concerns. Severino explained that unless a significant rally occurs before the end of the month, the blue line will cross below the orange line, officially turning momentum bearish. If the month closes with the crossover intact, it will mark the first confirmed bearish momentum shift on the LMACD since the bullish reversal in July 2023.

Severino noted that this crossover is not the only reason for a bearish outlook on Bitcoin’s medium-term trajectory, but it is the most precise technical marker that could trigger a rethink. The crossover is not isolated to Bitcoin’s price chart; it has also been confirmed in major indices like the S&P 500 and the Nasdaq 100. Additionally, the crossover has appeared in the BTCUSD versus GOLD chart, suggesting that Bitcoin is reacting to widespread macro pressures rather than moving in isolation.

Despite the bearish tilt, the situation is not yet final. The current crossover is provisional, meaning there is still time for bulls to reverse the signal. A powerful upward move this month could cause the blue LMACD line to diverge higher, reestablish upward momentum, and invalidate the bearish setup before it solidifies. Severino also noted the possibility of a rebound considering the current oversold levels, as oversold technical conditions generally create an environment conducive to a dramatic reversal.