Bitcoin’s price action is at risk of being thwarted at the Ichimoku Cloud, a technical analysis tool used by traders. In general terms, this positive cloud is affecting the recent momentum, support, and resistance dynamics in the market. Cryptocurrency analysts such as Omkar Godbole are looking at the Ichimoku Cloud to determine if this bearish trend has run out of steam.
The Ichimoku Cloud, an all-in-one indicator, was created by a Japanese journalist in the 1960s. Yet it offers market traders a glimpse of overall market momentum, possible areas of support and resistance. This proposed system would be centered around five color-coded lines. These include Leading Span A, Leading Span B, the Conversion Line (Tenkan-Sen), the Base Line (Kijun-Sen) and a lagging closing price line.
The Ichimoku Cloud or Kumo is created by the area between Leading Span A and Leading Span B. Traders know that the top and bottom of this cloud act as important support and resistance levels. Traders use these levels to identify future entry and exit points in the market.
In conjunction with other technical analysis tools, the Ichimoku Cloud can help traders identify the best times to enter your trades. Timing and level are very important to success when implementing this indicator. Not only when used effectively, the risk-reward ratio is heavily favored towards the traders.
In addition, the upper boundary of the Ichimoku Cloud can serve as resistance and the lower boundary as support. Bitcoin’s bullish price action is presently capped out by these heavy levels of resistance. Too, as an ocean analyst, this tool is critical for people like Omkar Godbole. They use it to get a better sense of the overall landscape of the cryptocurrency marketplace.
