Bitcoin Price Forecast: Cloudy With A Chance Of Downside
Bitcoin price is back above $55,000 in a lighting fast recovery from below the key level of $50,000. Although the rebound thus far appears as if it is a gift from the heavens above, the technical forecast suggests cloudy days are ahead.
Here’s a closer look at everything going on with Bitcoin “at a glance” and a deep dive into the Ichimoku Kinko Hyo indicator.
Forecast Says Cloudy Days Ahead For Top Cryptocurrency
Spring is in the air. The grass is turning green and the birds are chirping again. As the saying goes, “April showers bring May flowers.”
And although things have been fully bullish for some time in Bitcoin, April has been the first month where things have turned from green, to grey.
April kicked off aggressively, pushing Bitcoin to new highs. The top cryptocurrency consolidated there’s and made one more push higher the day Coinbase Global went public.
Related Reading | Bitcoin Loses Important Lifeline That Got Bulls Blood Pumping
The rejection there, however, sent Bitcoin price raining down, and pushed the cryptocurrency into and below the Ichimoku cloud.
If you’re questioning the validity of the cloud, also called the Kumo, then check out the zoomed in shot in the chart below. The example shows price action halting right at the edge of the cloud.
Bitcoin price action stopped right at the top of the cloud | Source: BTCUSD on TradingView.com
Could Bitcoin Price Rain Down Further?
The edge Bitcoin price stopped at is called the Senkou span B or leading span B, together with span A, they form the Kumo that widens and tightens depending on volatility.
When the two spans twist, it is a sign that things have turned fully bearish, which as can be seen is just starting to take place.
However, the Ichimoku indicator is said to offer a full “at a glance” look at the market, so there are more details to pay attention to.
Related Reading | Potential Island Reversal Leaves Bitcoin Bulls Stranded
The Tenkan-sen and Kijun-sen – also called the conversion line and base line – have crossed bearish. This itself has happened many times on the daily chart on the way up, but is the first time since the bull market began that Bitcoin is also trading within the cloud while this crossover happens.
The last piece of the Ichimoku indicator’s intel, is the Chikou span, or lagging span. This tool falls back several trading periods and shows where support and resistance might lie.
According to the tool and where price action clustered, the most prominent levels of support left untested if things do turn bearish in the short term, are $34,000 and $18,000 – two levels bulls do not want to return to. Will this cloudy forecast instead bring sunshine in May?
Featured image from Pixabay, Charts from TradingView.com