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Bitcoin price is in a pivotal zone, approaching the point of potential no-return for the bulls. However, the forecast for the end of the week may point to a sunny atmosphere ahead, as long as the BTCUSD pair is stable above the weekly Ichimoku cloud.
Here is a closer look at the weekly timeframes for BTCUSD “at a glance” using Ichimoku Kinko Hyo.
Bitcoin price stable above the cloud | Source: BTCUSD on TradingView.com
Quick Glimpse of Weekly Bitcoin Price Action Using Ichimoku
Using nothing more than the bare Ichimoku chart above, he touched the weekly BTCUSD and found support on the cloud – also called Kumo.
The blue conversion line is above the chestnut base line, which indicates that the market is still bullish, but is consolidating. An uptrend market may see bitcoin price trading above both lines.
Touching the cloud itself is not always important. However, it is only the weekly time frames, and a retest of the same cloud that started the bullish trend.
Flipping on the Ichimoku cloud in a bull race begins | Source: BTCUSD on TradingView.com
Cloud loss would be substantial. It could mean that the bullish cycle is over, or that extended consolidation is ahead. The last time the weekly cloud was lost was the Black Thursday crash in March 2020.
Ichimoku is among the few technical indicators that focus on time and price. Clicking on the cloud means it’s time to look for other signals for further confirmation.
Three possible supportive reversal signals can be found | Source: BTCUSD on TradingView.com
With more technical indicators running, things get more interesting. The TD Sequential Market Timing Indicator triggered a perfect buy setup, just as Bitcoin touches the cloud.
Sunday’s weekly close may remain near the current levels to end in a doji. How will the bulls react in the following week is enough.
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A green candle above $47,000 will break the local downtrend line and put the morning star candlestick pattern into play. However, it should be noted that the last possible setup of the weekly morning star has failed. But these signs were not confirmed until it was too late.
Meanwhile, the weekly stochastic is showing a bullish divergence. The bullish cross is also approaching during the reading which has historically placed more significant bottoms than these.
What to expect on the weekend before the BTCUSD weekly close
A doji candle indicates indecision and comes at the end of a trend, or at a pause before continuing. Fear in the market has left the weak and bulls drooling, but neither of them have been able to make much of a difference in the past five days.
The weekend outlook is for more of the same level, with the bulls needing to defend $42,000 and lower. Fear is likely to keep the bulls at bay even after the weekly close, when confidence returns and there is a possibility of a morning star reversal.
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If the doji candle indicates continuation rather than a reversal – the next logical target would be the bottom of the Ichimoku cloud around $37,000.
There is still more negative risk than that. Bitcoin price had a daily cross that could have shocking effects. The complete loss of the Ichimoku cloud may signal the end of the bullish cycle for the time being. Cloud recovery will be the first sign that the uptrend is back.
Whatever you do, keep a close eye on clouds over the weekend.
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Featured image from iStockPhoto, charts from TradingView.com