Bitcoin (BTC) has seen a significant surge in the first half of 2023, outperforming traditional risk assets by a wide margin. Despite this impressive performance, technical analysis research provider Fairlead Strategies maintains a long-term neutral stance on the world’s largest cryptocurrency by market value. According to Fairlead, a bullish outlook will only be established once BTC crosses the “Ichimoku cloud” resistance at $31,900 and if momentum indicators such as the MACD histogram confirm the move.
The Ichimoku cloud, created by Japanese journalist Goichi Hosoda in the late 1960s, is a tool primarily used by traders and analysts to define support and resistance levels and identify momentum and trend direction. It consists of two lines – the leading span A and the leading span B – with the gap between them forming the cloud. Crossovers above or below the cloud are generally interpreted as indications of a bullish or bearish trend change.
On the other hand, the MACD histogram is a moving average-based indicator that measures trend strength and changes. A crossover above zero suggests a shift towards bullish momentum, whereas a crossover below zero indicates the opposite.
Currently, BTC has not managed to breach the Ichimoku cloud on the weekly chart, as shown by TradingView data from CoinDesk. However, the weekly chart does reveal Bitcoin’s intention to extend its recent 15.5% increase, the largest since March. With the cryptocurrency currently trading at around $30,700, the cloud resistance is positioned at approximately $31,900.
Fairlead’s analysis identifies positive signals on the weekly chart MACD and an upturn in the stochastic indicator, which suggests the potential for a breakout above the cloud resistance. Additionally, the monthly chart’s MACD has yet to display the bullish signal.
Overall, analysts at Fairlead Strategies remain cautiously neutral on Bitcoin’s long-term outlook. They emphasize that a breakout above the weekly cloud resistance and a monthly MACD “buy” signal would be required to establish a bullish bias. These indicators are crucial for determining the shift in momentum and trend direction, but until they are confirmed, Fairlead maintains its neutrality.
The cryptocurrency market continues to exhibit strong volatility, with Bitcoin’s performance closely watched by investors and analysts alike. Only time will tell if BTC can break through the resistance and shift the long-term outlook to a more bullish stance.