u.today
According to prominent trader Josh Olszewicz, Bitcoin might be on the cusp of another bearish reversal.
The indicator is comprised of five different lines, two of which comprise the cloud (which can be either red or green).
The blue line, which can be seen in Olszewicz's chart, is called the "conversion line" or the "Tenkan" line. It represents the average for the last nine periods. It can be comparable to regular moving averages, but it has a higher level of precision.
The red line is called "the base line" or the "Kijun line." It shows the midpoint price of the previous 26 periods.
If the price of Bitcoin drops below the Kijun line, it means that it has a bearish bias.
As noted by Olszewicz, Bitcoin experienced its first Kijun tap since the breakout in early June. Even though the price of the top cryptocurrency could still recover from here, the trader argues that the preceding "triple top" structure actually hints at a bearish reversal.
As reported by U.Today, Bitcoin recently experienced extreme volatility due to geopolitical tensions. After collapsing to $61,514, Bitcoin has managed to pare some losses, currently trading at $64,251. Notably, roughly $1 billion worth of crypto has been liquidated over the past 24 hours.
It is also worth mentioning that the thickness of the cloud directly correlates with the strength of the momentum. In mid-December, for instance, the red cloud was getting thinner, which preceded the start of another downtrend. Bitcoin is up 73.74% on a year-to-date basis.