In a video posted on August 2, popular analyst and trader Crypto Jebb provides a detailed analysis of the current bearish indicators in the Bitcoin market and what they mean for the future of the cryptocurrency.
Introduction
Jebb notes that Bitcoin has recently seen a significant drop, falling to $64,000 and then to a local bottom at $62,000. This drop was expected due to several bearish indicators that have been flashing over the past few days.
Key technical indicators
Bearish MACD Cross
One of the main technical indicators that Jebb points out is the bearish MACD (Moving Average Convergence Divergence) crossover on Bitcoin’s daily chart. This indicator points to a potential switch from bullish to bearish momentum, indicating that the bears are taking control.
Crypto Jebba Oscillator
Jebb also discusses the Crypto Jebb Oscillator, a custom indicator he developed in partnership with Lux Algo. This oscillator recently showed a decline, signaling that bullish strength is weakening and bearish pressure is increasing. The oscillator helps visualize bullish and bearish acceleration, providing insight into market momentum.
Lux Algo Sell Signal
Another important indicator is the Lux Algo sell signal, which Jebb explains is a reliable tool for predicting market movements. The Lux Algo indicator showed a red sell signal, confirmed by a red trend trap, indicating a strong bearish trend. He says tsignal suggests that Bitcoin may continue to experience downward pressure in the coming days.
Fundamental Factors
Nonfarm payrolls and unemployment data
Jebb highlights the latest nonfarm payrolls and unemployment data from the U.S. Department of Labor. The data showed unemployment rising to 4.3%, which contributed to market uncertainty. He says this rise in unemployment, coupled with other economic factors, has created a bearish environment for Bitcoin and other risk assets.
US Stock Market Correlation
The US stock market is also in decline, which Jebb notes is impacting the price of Bitcoin. He explains that stock market performance is often correlated with Bitcoin, and the recent decline in US stocks has added to the negative sentiment in the crypto market.
Short-term and long-term prospects
Short term bearish trend
Jebb emphasizes that Bitcoin is currently in a confirmed downtrend, with several indicators pointing to continued bearish pressure. He advises investors to be cautious and be prepared for potential further declines, perhaps to the $60,000 level or even $55,000.
Long-term optimistic outlook
Despite the short-term bearish indicators, Jebb remains optimistic about Bitcoin’s long-term potential. He encourages investors to maintain a long-term perspective and continue with their investment strategies. He believes the current downturn presents an opportunity to accumulate more Bitcoin at lower prices.
Political and economic events
Support of political figures
Jebb discusses the growing political support for Bitcoin, noting that both former President Donald Trump and Senator Cynthia Loomis have suggested that the U.S. hold Bitcoin on its balance sheet. He believes that this political support could lead to broader institutional adoption and further legitimization of Bitcoin as an asset class.
Rate cuts and economic policy
Jebb also covers recent economic policy developments, such as the Bank of England’s decision to cut interest rates. He explains that lower interest rates could boost stock and cryptocurrency markets by making borrowing cheaper and spurring economic growth. He suggests that a similar rate cut by the US Federal Reserve could lead to significant gains for both stocks and Bitcoin.
Practical advice for investors
Dollar Cost Averaging
Jebb advises investors to continue dollar-cost averaging in Bitcoin and other strong cryptocurrencies. He suggests increasing weekly or monthly allocations to Bitcoin investments by 10% to 25% during this bearish phase. This strategy, he says, allows investors to accumulate more Bitcoin at lower prices, potentially benefiting from future price increases.
How to Avoid Panic Selling
Jebb cautions against panic selling in response to short-term market fluctuations. He stresses the importance of maintaining a long-term investment perspective and not reacting impulsively to temporary market dips. He encourages investors to remain calm and focus on their long-term goals.
Ethereum and other cryptocurrencies
Ethereum Performance
Jebb also touches on Ethereum’s recent performance, noting that it is in a downtrend similar to Bitcoin. He attributes this to factors such as the recent launch of the Ethereum ETF, which have caused a mixed reaction in the market. Despite the current bearish trend, Jebb believes that Ethereum has strong long-term potential, especially as the Ethereum ecosystem continues to grow and mature.
Altcoins and Diversification
Beyond Bitcoin and Ethereum, Jebb discusses the importance of diversifying into other altcoins. He advises investors to do their research and choose altcoins with strong fundamentals and growth potential. He says diversification can help spread risk and provide exposure to a wider range of opportunities in the crypto market.
Main image from Pixabay
