Bitcoin Again Bounces Off ‘Cloud’ Support, Resistance at $42.6K

Post ContentRead MoreFeedzy

Bitcoin defended critical price support early Monday, staving off a major technical breakdown that may have emboldened bears.

A popular technical analysis study, the Ichimoku cloud showed weekly support for bitcoin (BTC) near $37,600, and the leading cryptocurrency overnight tumbled to right around that level before stabilizing. At last check bitcoin had bounced back to $39,000.

The featured image shows the cloud has consistently acted as a support in recent weeks. As such, a breakdown early today could have invited more substantial chart-driven selling pressure.

While bitcoin has avoided the bearish scenario, for now, the cryptocurrency remains well below resistance at $42,600, defined for now by the past week’s high.

The long upper wicks attached to recent weekly candles imply repeated bull failure in the range of $42,600 to $45,900. As such, a convincing move above the resistance zone is needed to confirm a bull revival.

Created by Japanese journalist Goichi Hosoda in the late 1960s, the Ichimoku cloud includes two lines – the leading span A (green line) and the leading span B (red line). Both lines are plotted 26 days ahead of the last candle to indicate future support or resistance.

DISCLOSURE

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.