Bitcoin’s Bearish LMACD Signal Warns of Prolonged Downturn

Bitcoin’s slide into the mid-$80,000s has triggered what technical analyst Tony Severino describes as a pivotal momentum shift. The 6-week LMACD momentum indicator, known for its decisive crossovers that confirm long-term trend changes, has turned bearish for the first time in years. This development comes as Bitcoin trades at $85,670, down 11% over the past week and 23% over the past month, reflecting growing market uncertainty.

Severino’s analysis emphasizes that momentum is now firmly pointed downward, contradicting expectations among some traders that Bitcoin was poised for an explosive recovery. The 6-week LMACD serves as a lagging indicator, meaning by the time it flips bearish, Bitcoin is already well into a downturn. This characteristic makes the signal particularly significant for understanding the cryptocurrency’s medium to long-term trajectory.

Historical data from previous bearish crossovers on the 6-week LMACD reveals concerning patterns for Bitcoin investors. Following previous bearish signals, Bitcoin entered extended red phases lasting 812 days, 861 days, and 686 days respectively. These periods represent significant bear markets where prices remained under pressure for extended periods, challenging investor patience and market sentiment.

The severity of previous downturns following similar signals is particularly noteworthy. Historical cycles saw drawdowns of roughly 69% to 75% from the moment the LMACD cross occurred, even though Bitcoin had already fallen significantly before the indicator flashed. This pattern suggests that the current decline from recent highs might only represent the initial phase of a more substantial correction.

Perhaps most importantly, Severino notes that bear-market lows consistently appear between 250 and 365 days after the bearish flip occurs, not within weeks as some optimistic traders might hope. With the current crossover only 40 days old, this historical pattern suggests Bitcoin remains far from its cycle bottom, potentially requiring several more months of consolidation or decline before establishing a foundation for the next bull run.

The current technical outlook suggests traders should adjust their expectations for rapid price appreciation. Severino explicitly states he is not predicting the end of Bitcoin’s long-term prospects but is urging market participants to stop expecting immediate upside. The 6-week LMACD captures deep structural trends rather than short-term fluctuations, meaning Bitcoin could spend months hovering around current levels or experiencing further decline before any meaningful recovery begins.

It’s crucial to note that the current bearish crossover remains unconfirmed for another 15 days, and past performance doesn’t guarantee identical outcomes. There’s no certainty that Bitcoin will drop another 70% from current levels as seen in previous cycles. However, the consistency of historical patterns following similar signals provides a strong cautionary framework for investors banking on a quick recovery.

For Bitcoin traders and long-term holders, the analysis suggests preparing for extended volatility and potential further downside. The $85,670 price level may represent a temporary resting point rather than a definitive bottom, with the LMACD signal indicating that the path to the next major bull phase could be longer and more challenging than many market participants currently anticipate.