In the first half of 2023, Bitcoin (BTC) has experienced an impressive 85% rally, significantly outperforming traditional risk assets. Despite this upward trend, Fairlead Strategies, a technical analysis research provider, maintains a long-term neutral stance on the world’s largest cryptocurrency by market value.
According to Fairlead, the long-term outlook will change to bullish once BTC prices surpass the “Ichimoku cloud” resistance at $31,900, and momentum indicators such as the MACD histogram corroborate the move. In a note to clients on Monday, analysts at Fairlead Strategies stated, “We remain long-term neutral on Bitcoin, but a breakout above the weekly cloud and a monthly MACD ‘buy’ signal would dictate a bullish bias.”
The Ichimoku cloud, created by Japanese journalist Goichi Hosoda in the late 1960s, is primarily employed by traders and analysts to identify support and resistance levels and determine momentum and trend direction. It comprises two lines – the leading span A and the leading span B, with the gap between the two forming the cloud. Crossovers above or below the cloud are often interpreted as indicating bullish or bearish trend changes.
The MACD histogram, a moving average-based indicator, is used to measure trend strength and shifts. A crossover above zero signifies a bullish momentum shift, while a crossover below zero indicates the contrary.
Currently, BTC has yet to cross into bullish territory above the Ichimoku cloud on the weekly chart. At the time of writing, the cryptocurrency is trading at $30,700, with cloud resistance hovering around $31,900. Fairlead suggests that the positive reading on the weekly chart MACD and the upturn in the stochastic indicator imply potential for a breakout above the cloud resistance. However, the monthly chart MACD has not yet signaled a bullish move.
This highlights the ongoing uncertainty in the cryptocurrency market, despite Bitcoin’s strong performance in the first half of 2023. While some indicators suggest that a bullish trend could emerge once certain thresholds are achieved, it is clear that the market remains in a delicate balance. Crypto enthusiasts and investors must approach the market with caution, staying up to date on the latest trends and developments to make informed decisions.
In conclusion, the future of Bitcoin and its long-term outlook still remains uncertain. While Fairlead Strategies maintains a neutral stance on the cryptocurrency, it acknowledges the potential for a bullish trend if certain criteria are met. This further emphasizes the importance of continuous monitoring and analysis of market trends to better understand the trajectory of this ever-evolving market.
Source: Coindesk
