In our last BTC/USD analysis we noted that Bitcoin was reaching an important Fibonacci target at $56,000 area. We warned traders to be cautious as this area could very well be an important top. Trend remains bullish, but with high volatility being the norm in cryptocurrencies, traders need to adjust their strategies.
BTC/USD is falling sharply below $50,000. After such a parabolic rise in price, it should not come as a surprise to see sharp declines. Major support is now found at $45,000 and next at $34,000.
Using the Ichimoku cloud indicator we identify the two important support levels. The first level is where we find the kijun-sen(yellow line indicator). If this level is broken we should expect BTC/USD to move lower towards the Daily Kumo (cloud) at $34,000. The trend remains bullish but with signs of weakness. Resistance is at $51,585 and recapturing this level will be key for the short-term trend. A pull back towards the cloud and $34,000 is not out of the question, so bulls need to be cautious. I prefer to be neutral than bearish as the major trend remains upward.
