Bitcoin price closed its weekly candle last night at roughly $9,100 on the BTCUSD trading pair. The weekly close marks the fifth consecutive weekly close above the Ichimoku cloud.
During the last bull market, it was holding above this key level that sent Bitcoin skyrocketing. However, there are some signs that the trend may be turning down one more time before the uptrend begins.
Bitcoin Price (BTCUSD) Closes Fifth Consecutive Weekly Above the Cloud
Bitcoin price has been trading sideways now for nearly two full months. Repeated attempts to break through resistance above $10,000 have failed.
But just as many attempts to push Bitcoin to the downside have gotten bears nowhere. Each push down has wicked into the Ichimoku cloud on weekly timeframes.
Last night’s weekly close, has marked the fifth week in a row that the cryptocurrency has held above the key level. Wicks into the cloud, also called the kumo, signal that buyers have been ready and waiting to buy up each dip.
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Comparing the current price action holding above the cloud to the previous bull and bear market cycle shows similarities. If the asset can hold firm above the Ichimoku cloud on weekly timeframes, it could provide the base for a new uptrend to begin.
After Bitcoin held above the cloud on the weekly in late 2016, the cryptocurrency never looked back. Holding above it again here could result in a trip to the moon next.
Bitcoin Ichimoku BTCUSD Weekly | Source: TradingView
Ichimoku Indicator Signals Retest of Support Before Uptrend Confirmation And Bull Market Breakout
But before Bitcoin embarks on a new uptrend, a steep crash could be next. However, if the price action matches the last cycle, it’ll be the last chance to buy Bitcoin cheap before the bull market starts.
In the chart above, Bitcoin can be seen holding strong above the kumo on weekly timeframes. Just ahead of the Black Thursday collapse, the cloud couldn’t hold resulting in the crash.
This time around, the asset has held several weeks in a row. However, the indicator could be suggesting a drop soon.
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This most recent weekly candle has closed below the senkou span A, in blue. When the senkou span A crosses above the senkou span B, it signals an uptrend is in effect.
Price crossing below the senkou span A could hint that the uptrend is reversing, but the two lines would need to cross to confirm the trend change.
The cloud itself is also potentially pointing towards a crash. Ahead of the current price action, the cloud is twisting. A kumo twist also often indicates a trend change. A kumo twist is also a weak point in the cloud, that price can more easily pass through.
A fall through the kumo in the coming weeks cannot be ruled out. Bitcoin price breaking below the kumo, even temporarily, would likely send the asset to the senkou span B to test as support.
Bitcoin Ichimoku BTCUSD Weekly | Source: TradingView
Senkou span B is currently resting around $7,100. A retest of this zone as support confirming it as such could start the real bull market.
Zooming out further, ahead of Bitcoin’s 5000% rise after the cloud holding, it was breached quickly for a sharp decline and touch of the senkou span B. This held as support, and the biggest bull run in the asset’s history followed.
by Tony Spilotro on June 29, 2020 at 09:30PM
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