Bitcoin analysis with Ichimoku balance
Ichimoku is one of the most comprehensive tools in technical analysis. Contrary to common belief,
it is not complex or obscure; if understood correctly, it can be among the most accurate and reliable
indicators
for examining market trends.
In this analysis, we review Bitcoin’s balances and key levels across different timeframes
to clarify the probable price path and upcoming targets.
Ichimoku and its components
The Ichimoku system combines several lines and a “cloud,”
enabling traders to identify trend direction, support and resistance levels, and market momentum at a glance.
Each component of this indicator is calculated using specific formulas.
Main components and formulas
- Tenkan-sen (Conversion Line):
Average of the highest and lowest prices over the past 9 periods.
Formula:(Highest price in 9 periods + Lowest price in 9 periods) ÷ 2 - Kijun-sen (Base Line):
Average of the highest and lowest prices over the past 26 periods.
Formula:(Highest price in 26 periods + Lowest price in 26 periods) ÷ 2 - Chikou Span (Lagging Line):
The current closing price shifted 26 periods backward; used to confirm trend and alignment with price. - Senkou Span A:
Average of Tenkan-sen and Kijun-sen, shifted 26 periods forward.
Formula:(Tenkan-sen + Kijun-sen) ÷ 2 - Senkou Span B:
Average of the highest and lowest prices over the past 52 periods, shifted 26 periods forward.
Formula:(Highest price in 52 periods + Lowest price in 52 periods) ÷ 2
Ichimoku cloud
The space between Senkou Span A and Senkou Span B is called the “cloud” or Kumo.
Generally, if Senkou A is above Senkou B, the cloud is bullish and indicates positive trend strength;
conversely, if Senkou A is below Senkou B, the cloud is bearish and reflects selling pressure.
Professional analysts do not rely solely on the positions of the lines;
they also consider the cloud’s thickness and shape as indicators of trend strength or weakness.
Educational video: Ichimoku balance in Bitcoin analysis
The video below provides an example of Bitcoin analysis using Ichimoku balances.
It reviews trends, price targets, and key levels across multiple timeframes
to offer a more comprehensive view of the market.
