Key Crypto Ichimoku Levels
Many major cryptocurrencies indicating some powerful bearish movements ahead when using the Ichimoku system as a primary form of trend analysis.
Bitcoin (BTC) Ichimoku Analysis
The image above is Bitcoin’s daily Ichimoku chart. One of the strategies I employ during my own intraday trading is to use the daily chart as the gauge and the filter of the direction of the trades I will be taking. Very simply, I look at the location of the where price is at in relation to the Kumo. Looking at the current daily chart for Bitcoin, we can see that the current position of price is below the Kumo (cloud). This means that any intraday trades would only be short trades. However, I also filter an entry based on the location of where the Chikou Span is as well – it has to be below the candlesticks in order to initiate a trade on any chart. Bitcoin’s current chart has some strong bearish signals in front of it, the primary signal being price below the cloud. Buy we also see the cloud ahead is bearish (red), the Tenkan-Sen is below the Kijun-Sen and the Chikou Span is below the cloud. If the Chikou Span does drop below the candlesticks, this could initiate another bear market move over the long term.
Ethereum (ETH) Ichimoku Analysis
Ethereum has an inherently bearish and strong bearish continuation pattern on its chart. There is not a single bullish condition on its daily Ichimoku chart. The most glaring condition of why this chart is so bearish is that price and the Chikou Span are both below the cloud and the Chikou Span is below the candlesticks and in what Manesh Patel called, ‘open space’. Open space is a condition where the Chikou Span won’t intercept any candlesticks in the next 10 periods from its present value. When this happens, it means that there is a strong pressure in the direction of the trend with little to no resistance ahead. In addition that bearish condition, the Tenkan-Sen and Kijun-Sen are both below the cloud with the Tenkan-Sen below the Kijun-Sen as well. We can also see that the cloud ahead is a very thick cloud, indicating strong and persistent downside pressure for the given future.
Litecoin (LTC) Ichimoku Analysis
Litecoin continues to experience no supportive price action or participation. Just like Ethereum, Litecoin has its Chikou Span below the candlesticks and in open space along with the Chikou Span and price below the cloud. What really exacerbates the downside move here is that the current Senkou Span A and B are both sloping in the direction of the current cloud, this generates significant and persistent long term trend direction on a daily chart. In fact, there is almost no support for Litecoin between where it is current trading down to the $20 value area. This kind of price action though was predicted and should be expected, especially after the halving event. It was expected that Litecoin’s hashrate would decrease significantly as the rewards for mining have been cut in half. However, the difficulty will decrease as the miners decrease and it will again be profitable, in the later future, to mine for Litecoin again.