Bitcoin May Target “The Cloud” To $40K
Bitcoin bulls are hoping that the bottom is in and going on another lunar mission towards new records.
But before it gets there, if the bottom is indeed in, the top cryptocurrency by market capitalization could target the top of the weekly BTCUSD Ichimoku cloud next. Let’s take a look.
Why Bitcoin May Target $40,000 Soon
Developed in the 1930s by Japanese journalist Goichi Hosoda, Ichimoku Kinko Hyo loosely translates to “at-a-glance equilibrium diagram.”
The Ichimoku indicator is a unique tool that generates a “graphical environment” with a series of signals. For example, Bitcoin is trading above the Tenkan-sen and the Kijun-sen, which is a bullish signal. However, the two line cross remains bearish and the sideways action of the Kijin-sen suggests that the market lacks a clear trend direction.
Bitcoin passing above the two lines lately has made a bottom on a one-week time frame. If the bottom is indeed in, history suggests that the next stop for BTCUSD will be the top of the Ichimoku cloud located at approximately $40,000 per BTC.
Could Bitcoin target the top of the cloud next? | BTCUSD on TradingView.com
BTCUSD History and the Ichimoku Cloud
After Bitcoin’s first ever 90% correction, the young cryptocurrency returned to the top of the cloud at around $16 in 2012 before climbing to over $1,000 per coin.
In 2015, BTCUSD bottomed out at about $150, then bounced to the top of the cloud at about $400 in 2016 before exploding to $20,000 in 2017. After the bottom of 2018 was in, Bitcoin once again took the top of the cloud as the next stop at around $13,000 per BTC.
History suggests the cloud it the target | BTCUSD on TradingView.com
Today, Bitcoin is trading at $22,000 and the top of the Ichimoku cloud is at about $43,000 per coin. If history repeats itself – and the cryptocurrency is currently three for three when the bottom was in – Bitcoin could reach its goal in a matter of months.
The cloud, also called the kumo, consists of Senkou range A and Senkou range B. The edges of the kumo identify possible areas of future support and resistance.
Other signals the kumo can provide include measuring volatility when clouds narrow or thicken, or potential trend changes when the cloud goes from red to green or vice versa.
After a major collapse and FTX-related volatility, the Ichimoku cloud looks extra thick, but it may ultimately prove to be where Bitcoin is targeting next.
