Bitcoin price is in a crucial zone and is approaching a potential point of no return for bulls. However, the weekend forecast could indicate that the skies will be sunnier going forward as long as BTCUSD holds above the weekly Ichimoku cloud.
Here’s a closer look at BTCUSD’s weekly timeframes “at a glance” using the Ichimoku Kinko Hyo.
Bitcoin price is holding above the cloud | Source: BTCUSD on TradingView.com
Weekly Bitcoin Price Action at a Glance with Ichimoku
With nothing but the bare Ichimoku chart above, BTCUSD Weekly has touched the cloud – also known as Kumo – and found support.
The blue conversion line is above the maroon baseline, indicating the market is still bullish but consolidating. An uptrending market would result in bitcoin price trading above both lines.
Touching the cloud itself doesn’t always matter. However, just weekly timeframes, retesting the same cloud, was what triggered the bull run.
Flipping the Ichimoku cloud started the bull run | Source: BTCUSD on TradingView.com
The loss of the cloud would be significant. It could mean that the bull cycle is over or that an extended consolidation is imminent. The last time the weekly cloud was lost was the Black Thursday collapse of March 2020.
The Ichimoku is among the few technical indicators that focus on both times and Price. Tapping the cloud means it is time to look for other signals for more confirmation.
Three potential supporting reversal signals can be found | Source: BTCUSD on TradingView.com
When more technical indicators are on, things get a lot more interesting. The TD Sequential Market Timing indicator triggered a perfected buy setup just as bitcoin hits the cloud.
The weekly close on Sunday evening could very well stay near current levels and end with a doji. How the bulls react over the following week would be instructive.
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A green up candle above $47,000 would break a local downtrend line and bring a Japanese morning star candlestick pattern into play. However, it’s worth noting that the last potential weekly morning star setup failed. But such signals are only confirmed in hindsight.
At the same time, the weekly stochastic shows a bullish divergence. A bullish crossover is also approaching at a level that has historically made more significant lows than this one.
What to expect this weekend ahead of BTCUSD’s weekly close
A Doji candle signals indecisiveness and comes at the end of a trend or at a pause before continuation. Fear in the market has left the bulls weak and drooling, but neither has been able to make much of a difference over the past five days.
The weekend forecast points more towards the same level, with the bulls having to defend $42,000 and below. Fear will likely keep the bulls at bay until after the week close when confidence returns and the possibility of a reversal in the Morning Star.
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If the doji candle was pointing to a continuation rather than a reversal, the next logical target would be the bottom of the Ichimoku cloud around $37,000.
There is still a risk of further downside. Bitcoin price just had a daily death cross that could have apocalyptic implications. The complete loss of the Ichimoku cloud could indicate that the bull cycle is over for now. Retaking the cloud would be the first sign that the bull run is back on track.
Whatever you do, keep a close eye on the clouds this weekend.
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Featured image from iStockPhoto, Charts from TradingView.com