Key Bitcoin indicators are hinting that Bitcoin will go into a bearish market soon. This happens as the industry is analyzing the speech by the Federal Reserve Chairman Jerome Powell at the Jackson Hole Symposium.
In this article, we’ll go over the key indicators that have led experts to believe that a bearish turn is coming, as well as other indicators that investors should be aware of. When several indicators point to the same conclusion, chances are there will be a shift in the crypto market.
180-Day Call-Put Skew
Experts such as the ones from CryptoManiaks are pointing out that crypto exchanges are showing a negative 0.42 180-day skew. This is the lowest it has been since 2023. A negative skew indicates that the traders are pricing a greater demand for the put option.
This data is usually interpreted as the market is cautious about the medium term. Simply put, most investors believe that the price of Bitcoin will soon drop. It’s important that all of this is happening as the price has pulled back about 8 percent since the all-time high of $124,000.
200-day Moving Average (200DMA)
When it comes to long-term trends, the 200-day moving average is one of the most important to follow. When Bitcoin is trading above its previous high, that means the trend is bullish, and the opposite is true. Traders often see this indicator as a line in the sand.
At this point, 200 DMA for Bitcoin is about $100,430.24. The price of Bitcoin is steadily above it, with the average price of $115,000. That would indicate that the bearish shift isn’t as close as some would believe. It’s also important to note that Bitcoin is nearing the so-called death cross when the 50-day average crosses below the 200-day average.
Declining Trading Volume
Trading volume refers to the total value of Bitcoin being traded. If there’s an uptrend in terms of price, there should also be a rise in the trading volume. If the price is rising, but the volume is shrinking, it’s probably because the trend is fake.
In the past 24 hours, BTC trading volume has been between $50 billion and $80 billion, depending on the size of the exchange. The trading volume indicates that the market is strong and that there’s a healthy interest in Bitcoin.
Fear and Greed Index
The fear and greed index refers to the daily score that captures the market sentiment around a particular cryptocurrency. When the investors get greedy, they buy more, and when they are afraid of market volatility, they don’t. It’s calculated based on volatility, market momentum, social media sentiment, surveys, Bitcoin dominance, and search engine trends.
Currently, most experts report the greed index is about 56 out of 100, indicating greed. It means that the investors feel confident to buy Bitcoin. There is a value difference between platforms, but most of them agree we’re still firmly in the greed area.
Regulatory Pressure
Bitcoin prices tend to drop when there’s pressure from the government and the regulatory agencies. The GENIUS Act just established a new regulatory framework for Bitcoin, the first such comprehensive act in the US. The CLARITY Act also determined that digital assets are commodities and not money from the government’s point of view.
All of these regulation efforts didn’t push down the Bitcoin prices, and in fact, they were welcomed by the industry. They provided the much-needed framework in which the industry can operate. Other jurisdictions, such as the EU, have done it before the US.
Strong Dollar Index and Rising Interest Rates
A strong dollar and high interest rates lead to lower BTC prices. The investors move to yield-bearing assets, and the demand is reduced when these indicators come together. The Federal Funds target range today is 4.25%–4.50%, with the upper limit confirmed at 4.50%. After the FED chair suggested a dovish approach, Bitcoin surged another two percent.
This administration and political climate in general is seen as very pro Bitcoin, and it’s seen in their policies. The industry in general expects a prolonged period of stability and a wider acceptance of Bitcoin in the years to come.
To Sum Up
A key indicator is showing that Bitcoin will have a shift towards a bearish market. This is seen via the market sentiment, as more investors are betting on the price of Bitcoin dropping than rising. However, most of the other indicators aren’t showing signs of the market slowing down.
A supportive environment created by this administration and the overall market sentiment towards crypto are all in favor of Bitcoin. The changes in the 180-Day Call-Put skew should be something that the investors are aware of, but it’s still not reason enough to worry about sudden changes in Bitcoin value, given the other indicators.
