A pivotal zone is defining Bitcoin’s price, and it could be nearing the point where there will be no more returns for bulls. But, the forecast for the weekend could indicate that sunny skies may be on the horizon, provided BTCUSD stays above the weekly Ichimoku cloud.
Here is a closer look at BTCUSD weekly timeframes “at a glance” using the Ichimoku Kinko Hyo.
Source: BTCUSD on TradingView.com| Source: BTCUSD on TradingView.com
Ichimoku: Weekly Bitcoin Price Action at a Glance
Using nothing more than the naked Ichimoku chart above, BTCUSD weekly has touched and found support at the cloud – also called the Kumo.
The maroon-colored baseline is visible above the blue conversion, which indicates the market is bullish and consolidating. If Bitcoin prices were to trade above these lines, it would be a bullish market.
Touching the cloud itself isn’t always significant. Retaste the cloud only once a week is enough to kickstart the bull run.
The bull run began with the flipping of the Ichimoku cloud| Source: BTCUSD on TradingView.com
The consequences of losing the cloud could be severe. This could indicate that the bull cycle is over or that consolidation will continue. Last week, the weekly cloud disappeared with the March 2020 Black Thursday crash.
Ichimoku is one of few technical indicators to focus on time. price. To tap the cloud, it means that it is TimeTo confirm, you can look out for additional signals.
You can find three possible supporting reversal indicators on TradingView.com| Source: BTCUSD on TradingView.com
Things get even more exciting when technical indicators are turned on. A perfect buy setup has been created by the TD Sequential market timing indicators, much like Bitcoin touching the cloud.
Sunday night’s weekly close could very well remain near current levels to end with a doji. It will be interesting to see how bulls respond in the coming week.
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Green up candles above $47K could break through the downtrend line, putting a Japanese morning-star candlestick pattern into play. However, it is important to note that the previous potential weekly morningstar setup did not work out. However, such signals can only be confirmed with hindsight.
Weekly Stochastic also shows a bullish divergence. Also, a bullish crossover may be nearing at a reading which has traditionally had higher bottoms.
How to expect this weekend ahead of the BTCUSD Weekly Close
The doji candle is a sign of indecision. It can be seen at the conclusion of a trend or before it continues. Bulls are weakening and bulls salivating from fear, but they have not been able make any significant difference over the past five days.
According to the weekend forecast, bulls will need to protect $42,000 or less. Bulls won’t be able to move until the close of the week, but fear will keep them away. Once confidence has returned, there may be a reversal in the morning.
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If the doji candle were to hint at continuation instead of reversal – the next logical target would be the bottom of the Ichimoku cloud at around $37,000.
The danger that there could be more down side effects than this exists still. A daily death cross occurred for Bitcoin, and this could lead to apocalyptic outcomes. The bull cycle may have ended if the Ichimoku cloud is lost completely. It would signal that the bull run has resumed by taking back the cloud.
No matter what you do, be sure to pay attention to the skies this weekend.
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Featured Image from iStockPhoto. Charts from TradingView.com