First Litecoin, now Bitcoin! Out of the three major Coinbase coins (Bitcoin, Ethereum, and Litecoin), Litecoin has been the leader in a breakout from consolidation. Today we finally see the ‘big brother’ of all cryptocurrencies, Bitcoin, make its move outside of consolidation and into the coveted $10,000 value area.
Lets first review the Ichimoku system:
Two moving averages, Conversion Line (Blue) and the Base Line (Red) indicated a backward view of recent price action.
The ‘Cloud’, the color ‘blobs’ represent the area between the Conversion Line and the Base Line and then are colored in and the moved forward on our chart. There are three clouds on this chart, the blue representing an 8-hour time period, the orange a 4-hour period and the red/green a 1-hour period.
The Lagging Span (Black) is the current price action moved back X-amount of time periods.
When price is above the clouds, we consider the trend to be bullish, we only want to buy above the cloud. When price is trading below the clouds, we only want to sell/short.
1. Bitcoin has finally started to tackle the $10,000 value area. We should expect some resistance and range trading around this area. Currently, Bitcoin is trading above the Conversion and Base Lines. This indicates a strong trend. We can expect to see some pullbacks in price to either of those two lines as well as a pullback to the cloud itself.
2. For the first time in over almost 60 days of trading, Bitcoin is trading above all three of these clouds. This represents strong bullish sentiment and an end to a consolidative move. It shows a breakout and a change in trend for the Bitcoin.
3. Notice the volume that has participated in this move over the last 24 hours. It’s huge. It is some of the largest volume we have ever traded with Bitcoin. This kind of activity at a new swing high can be viewed as bearish, especially because we are near a historically difficult resistance area. However, there has been significant participation in the entire cryptocurrency market as a whole. Looking at past price action, we can observe that volume continues to flow into Bitcoin and many of the dips in price get bought up.
What does this mean?
Litecoin and Bitcoin have made their moves. The only laggard right now, surprisingly, is Ethereum. Ethereum has yet to make its big move and to display a similar strong move outside of its current trading area. Just as Bitcoin was coiling up until it breached the $10,000 area, Ethereum is coiled near it’s $1,000 area. We should expect some profit taking and consolidation with Litecoin and Bitcoin until Ethereum catches up and has its own breakout pattern.