We’re still high above the clouds, for now…
Updated
The Gist
BTC, as boring as it has been for the past few weeks, continues to trade sideways between 9k and 13k with a failed attempt on the weekly chart to close above 12k this year. Despite the sideways action and the sporadic 10% drop in BTC we experienced mid-week last week, investors and traders need to be able to look past that. Trading can bring any trader, whether it be a complete beginner or a seasoned veteran, a tumultuous swings of emotions. Crypto trading can be categorized by two types of traders: HODL’ers and Kamikazes (aka Bitmex traders eh-hmm..). But nevertheless, to continue with the Japan reference theme (which is still a country I am yearning to travel to. I hear nothing, NOTHING but good things about the country), let’s look at a not so commonly used Japanese born indicator.
Breakdown
The Ichimoku Cloud. To give a brief about what this technical indicator is…it was developed by Goichi Hosoda in the late 1960s with the purpose of being able to show support and resistance levels, as well as leading and lagging trend directions. Now it may look daunting at first but for now just focus on the blue and white ‘cloud looking lines’ in the back of the candlesticks (ignore the Fib lines for now). The white line is an average of a 9-period average and a 26-period average. The blue line represents a 52 period average. Both lines are then plotted 26 periods in the future. The general rule of thumb is that if the price is above the clouds, the uptrend is strengthened and vice versa. And we could see that clearly in the chart as the prices for the past 60 days have been above the clouds. Although the sideways price action has been frustrating for traders, the overall trend paints a prettier picture.
The conversion line (yellow) still hovering above the base line (pink) is another confirmation we could use to conclude that this year’s bull run still has some leg to it. The 14-period RSI is another indicator I like to complement the Ichimoku Cloud with. Still below the 80 threshold looking perhaps to bounce off the 60 level, we should not count out the possibility of prices looking to uptrend once again.
Conclusion
As seldomly used, the Ichimoku Cloud can paint a more clearer picture in the sky (no pun intended). As we see BTC prices still hovering above the clouds with confirmation from the conversion and base line crossover coupled with a relatively stable 14 period RSI, let’s not count out another swing in the market sometime soon. If BTC somehow breaks through the 12k mark, look for this level to act as future support. If somehow BTC reverts to the downside, the worst case scenario would be 6.5K acting as the support line. So buckle up traders, investors, and crypto enthusiasts. With the trade war escalating and a potential for another rate cut by the Fed, it’s bound to be a bumpy ride going into 2H ’19.
Thanks for reading my first Medium post! Follow me on Twitter please! @crypto67sauce
BTC, as boring as it has been for the past few weeks, continues to trade sideways between 9k and 13k with a failed attempt on the weekly chart to close above 12k this year. Despite the sideways action and the sporadic 10% drop in BTC we experienced mid-week last week, investors and traders need to be able to look past that. Trading can bring any trader, whether it be a complete beginner or a seasoned veteran, a tumultuous swings of emotions. Crypto trading can be categorized by two types of traders: HODL’ers and Kamikazes (aka Bitmex traders eh-hmm..). But nevertheless, to continue with the Japan reference theme (which is still a country I am yearning to travel to. I hear nothing, NOTHING but good things about the country), let’s look at a not so commonly used Japanese born indicator.
Breakdown
The Ichimoku Cloud. To give a brief about what this technical indicator is…it was developed by Goichi Hosoda in the late 1960s with the purpose of being able to show support and resistance levels, as well as leading and lagging trend directions. Now it may look daunting at first but for now just focus on the blue and white ‘cloud looking lines’ in the back of the candlesticks (ignore the Fib lines for now). The white line is an average of a 9-period average and a 26-period average. The blue line represents a 52 period average. Both lines are then plotted 26 periods in the future. The general rule of thumb is that if the price is above the clouds, the uptrend is strengthened and vice versa. And we could see that clearly in the chart as the prices for the past 60 days have been above the clouds. Although the sideways price action has been frustrating for traders, the overall trend paints a prettier picture.
The conversion line (yellow) still hovering above the base line (pink) is another confirmation we could use to conclude that this year’s bull run still has some leg to it. The 14-period RSI is another indicator I like to complement the Ichimoku Cloud with. Still below the 80 threshold looking perhaps to bounce off the 60 level, we should not count out the possibility of prices looking to uptrend once again.
Conclusion
As seldomly used, the Ichimoku Cloud can paint a more clearer picture in the sky (no pun intended). As we see BTC prices still hovering above the clouds with confirmation from the conversion and base line crossover coupled with a relatively stable 14 period RSI, let’s not count out another swing in the market sometime soon. If BTC somehow breaks through the 12k mark, look for this level to act as future support. If somehow BTC reverts to the downside, the worst case scenario would be 6.5K acting as the support line. So buckle up traders, investors, and crypto enthusiasts. With the trade war escalating and a potential for another rate cut by the Fed, it’s bound to be a bumpy ride going into 2H ’19.
Thanks for reading my first Medium post! Follow me on Twitter please! @crypto67sauce
Comment
still above the weekly ichimoku. bounce/support seems likely at the 6500/6400 level.Comment
BTC breaking downwards through the clouds looks unstoppable. By next week it should be under.
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