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Bitcoin defended critical price support early Monday, staving off a major technical breakdown that may have emboldened bears.
A popular technical analysis study, the Ichimoku cloud showed weekly support for bitcoin (BTC) near $37,600, and the leading cryptocurrency overnight tumbled to right around that level before stabilizing. At last check bitcoin had bounced back to $39,000.
The featured image shows the cloud has consistently acted as a support in recent weeks. As such, a breakdown early today could have invited more substantial chart-driven selling pressure.
While bitcoin has avoided the bearish scenario, for now, the cryptocurrency remains well below resistance at $42,600, defined for now by the past week’s high.
The long upper wicks attached to recent weekly candles imply repeated bull failure in the range of $42,600 to $45,900. As such, a convincing move above the resistance zone is needed to confirm a bull revival.
Created by Japanese journalist Goichi Hosoda in the late 1960s, the Ichimoku cloud includes two lines – the leading span A (green line) and the leading span B (red line). Both lines are plotted 26 days ahead of the last candle to indicate future support or resistance.
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