Analysis of Bitcoin’s current trading behavior on the Daily, 4-hour and 1-hour timeframes using the Ichimoku Kinko Hyo system. 

 

Bitcoin (BTC) Daily Ichimoku Chart

 

Bitcoin continues to show strong and sustained support against the top of the Kumo. The Friday (July 19th, 2019) close was above the Tenken-Sen and so far this has continued into today’s close (July 20th, 2019). The near term resistance up ahead is the Kijun-Sen which is just above at 10,234.22. The RSI remains in neutral territory, flattening out just above level 50. The %B line also shows a neutral condition that is flattening out. It would be perfectly normal for price to have a very right trade range before the next breakout could/would occur on the daily chart.

 

Bitcoin (BTC) 4-hour Ichimoku Chart

 

Bitcoin’s 4-hour Ichimoku chart shows some mixed signals that could be interpreted as bullish or indecisive. From the bullish perspective, we can see that there are all conditions met for taking a trade based on Manesh Patel’s K-Cross strategy – an aggressive intraday trading strategy. The rules for a long entry are

  1. Price above the Kijun-Sen
  2. Tenken-Sen above the Kijun-Sen
    1. If not, Tenken-Sen must be pointing up while the Kijun-Sen is flat or pointing down.
  3. Future Senkou Span A is greater than Future Senkou Span B
    1. If not, Future Senkou Span B must be flat or pointing down and Future Senkou Span A must be pointing up.
    2. Chikou Span above price from 26 periods ago.

Currently, price is at a condition where an entry with the K-Cross strategy is appropriate. However, price is not inside the 4-hour Kumo and this means that there is indecision as long as price remains inside the Kumo. The Kumo is also thick. A thick Kumo means strength, so it will be difficult for price to move higher out of the Kumo compared to moving lower. But I see two very, very bullish conditions with the 4-hour Chikou Span. The Chikou Span is not only above the candlesticks, but it is also currently above the Kijun-Sen. The Chikou Span is also in ‘open space’ – meaning that it won’t intercept any candles over the next 10-periods. This means that price has an ‘easy’ path higher. The RSI remains below the first overbought condition. We do have a bullish buy entry signal on the %B with it crossing above the 0.8 line – this could generate some sustained and strong bullish pressure in the very near future on this 4-hour chart.

 

Bitcoin (BTC) 1-hour Ichimoku Chat

 

Bitcoin’s 1-hour Ichimoku chart shows continued pressure higher after the flash spike that occurred on Thursday (July 18th, 2019). We continue to see price find support against the 1-hour Kijun-Sen. There was some strong selling that occurred in the last hour prior to the close of today’s candlestick, which was the last hour of the trading day. Price did drop below the Kijun-Sen but rallied back above to close above it. It is currently trading below the Tenken-Sen but above the Kijun-Sen. There is also an inverse head-and-shoulder pattern (not shown) that shows a probable retest of the neckline. The bullish breakout above the neckline will be tested over the next few hours to see if this break above is an honest or false move. There is some evidence of some near term bearish movement with the RSI coming down from overbought conditions and the %B crossing below the 0.8 level. Both the RSI and the %B are near their support levels. If price does drop below the 1-hour Kijun-Sen, then we will need to see price find support against the top of the Kumo or we could see a break of this bear flag – time will tell.