Have you ever watched a market that felt invincible suddenly stumble, and you just knew something bigger was brewing? That’s exactly where we are with Bitcoin right now.
Over the weekend, something quiet but incredibly meaningful happened on the monthly chart: the MACD histogram flipped red for the first time in years. If you’ve been around crypto long enough, you know this isn’t just another daily candle wick. This is the kind of signal that showed up before some of the nastiest drawdowns we’ve ever seen.
Let me walk you through why this matters — and why the macro backdrop is making everything feel a lot heavier than usual.
The Monthly MACD Doesn’t Lie (And It Just Turned Bearish)
Most traders live on the four-hour or daily timeframes. That’s fine for scalping, but when the monthly MACD flips, the big money starts paying attention.
Think about it this way: the monthly MACD is like the market’s heartbeat monitor. When it prints a fresh negative bar after years of positive momentum, it’s telling you the patient might be heading for intensive care.
We’ve seen this exact pattern before:
- 2014 — bear market that took BTC from $1,000 to under $200
- 2018 — the brutal crypto winter after the ICO bubble
- 2022 — when Luna and FTX imploded and Bitcoin bled for months
Every single time the monthly histogram went negative after a prolonged bull run, the downside was measured in months, not days. And right now? We’re watching that same red bar form.
What Actually Happened This Weekend
The move caught a lot of people off guard because it happened during thin weekend liquidity. Bitcoin was sitting pretty around $92k, everyone was talking about $100k by Christmas, and then — bam — Japanese bond yields started climbing fast.
Suddenly the yen carry trade started unwinding. Funding rates that had been insanely positive flipped hard. Leveraged longs got wrecked. Over $2 billion in positions liquidated in a few hours.
I’ve traded through a few of these overnight bloodbaths, and this one had that same ugly feel. The kind where stop-losses cluster like dominoes and there’s literally no bid until way lower.
When liquidity dries up and macro triggers hit at 3 a.m. UTC, technical levels stop mattering until the pain is extreme.
Why Japanese Yields Matter More Than You Think
Most crypto traders completely ignore traditional markets. That’s usually fine — until it’s not.
Right now Japan is in the middle of what might be the most important monetary policy shift in decades. The Bank of Japan has been the world’s free money machine for years. Negative rates, endless QE, the whole thing.
But something changed in 2024. Inflation finally showed up in Japan. Wages are rising. The yen has been getting destroyed. And now the BOJ is talking about actual rate hikes.
When Japanese 10-year yields spike from 0.3% to over 1.5% in a matter of months, that’s a massive deal for global risk assets. The carry trade that funded so much crypto leverage? It’s reversing.
The ETF Flow Problem Nobody Wants to Talk About
Remember when spot Bitcoin ETFs were supposed to be the holy grail? They brought in billions. BlackRock’s IBIT became one of the fastest-growing ETFs in history.
But here’s what people miss: ETF flows are Wall Street hours only. When Asia and Europe are trading and something breaks at 4 a.m. New York time, there’s zero institutional bid from those funds.
That’s exactly what happened this weekend. No fresh ETF money coming in to cushion the fall. Just retail leverage and thin order books getting absolutely torched.
Ethereum Is Flashing Even Uglier Signals
If Bitcoin is the canary in the coal mine, Ethereum is already coughing up blood.
The ETH/BTC pair is making new lows. The 50-day moving average just crossed below the 200-day — hello, death cross. Gas fees are back to pandemic levels (the bad kind). Staking yields are compressing.
In my experience, when Ethereum starts underperforming this badly during a Bitcoin correction, it usually means we’re not just getting a quick dip. We’re getting a proper risk-off environment across the entire crypto space.
Where Are the Realistic Downside Targets?
Let’s talk levels, because that’s what actually matters now.
The most important line in the sand is the trendline connecting the major higher lows from last year. That’s sitting right around $74,000–$76,000 right now. Lose that on a monthly close, and things get really ugly really fast.
Below that?
- $68,000 — the previous all-time high from 2021
- $59,000–$61,000 — where a ton of ETF buyers got in
- $52,000 — the .618 Fibonacci retracement of the entire move up from the 2022 lows
I’ve seen markets respect these levels for months. I’ve also seen them get blown through like tissue paper when macro conditions align against risk assets. Right now? Everything is pointing toward the latter.
The Contrarian Case (Because There Always Is One)
Look, I’ve been wrong calling tops before. Plenty of times.
There are a few things that could still save this market:
- Short squeeze potential is massive — open interest is still high and funding is deeply negative
- Any dovish surprise from the Fed could reverse the dollar strength
- Trump’s pro-crypto administration takes office in January and starts making noise
- Institutions could decide this dip is the buying opportunity of the cycle
But here’s the thing — none of those things help you if the monthly MACD is red and Japanese yields are spiking and leverage is getting purged. Those are the conditions where hope gets expensive.
What I’m Doing With My Own Portfolio
Full disclosure: I took profits aggressively above $90k. Still holding a core position, but I’ve moved a chunk to stablecoins and even added some short exposure through perpetuals.
Am I calling for $30k Bitcoin? No. But am I preparing for the possibility that this monthly signal means business? Absolutely.
The way I see it, there are two realistic scenarios:
- We grind lower for weeks/months as this macro pressure works through the system — think $60k–$70k range
- We get one massive short squeeze back to new highs that traps everyone who sold the dip, then roll over hard
Either way, the risk/reward doesn’t look great for new long positions right here.
The market can remain irrational longer than you can remain solvent — but when the monthly charts turn, irrationality has an expiration date.
Bitcoin has survived everything thrown at it for fifteen years. It’ll survive this too. The question is whether your portfolio will survive buying the top of what might be the final leg of this cycle.
I’ve learned the hard way that respecting monthly signals — especially when macro headwinds are this strong — usually pays better than fighting them.
The red bar is there. The yields are rising. The leverage is purging.
Sometimes the chart really is telling you exactly what’s coming next.
Stay safe out there.
