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CoinDesk 2025-04-14 12:24:47

Bitcoin Faces 'Cloud Resistance' at $85K, Neutralizes Risk-Reward for Bulls: Godbole

This is a daily technical analysis by CoinDesk analyst and Chartered Market Technician Omkar Godbole. In markets, securing the best entry point is often half the battle, as timing and level significantly influence success by skewing the risk-reward ratio in traders' favor. While bitcoin's (BTC) near-term outlook may appear constructive with increased demand for bullish bets in the options market, the cryptocurrency's proximity to key resistance that capped the upside in recent months means the risk-reward profile for those looking to capitalize on the bullish prospects is less favorable. Since Saturday, BTC has been pushing against the lower boundary of the "Ichimoku cloud" at around $85K. Developed by a Japanese journalist in the 1960s, the Ichimoku cloud is a technical analysis indicator that offers a comprehensive view of market momentum, support, and resistance levels. The indicator comprises five lines: Leading Span A, Leading Span B, Conversion Line or Tenkan-Sen (T), Base Line or Kijun-Sen (K) and a lagging closing price line. The difference between Leading Span A and B forms the Ichimoku Cloud, with its upper and lower boundaries serving as potential support and resistance levels based on the price's position relative to the cloud. When prices are above the cloud, it indicates a bullish trend, while prices below suggest a bearish trend. In early February, BTC fell below $100K, trading beneath the Ichimoku Cloud. Since then, the cloud's lower boundary has functioned as a strong resistance and supply zone, limiting recovery rallies. As BTC trades near this level again, bulls, especially those looking to hit the market with fresh bids, might want to be cautious. The immediate upside may be restricted by cloud resistance around $85K, while support lies below $75K, nearly $10K lower from the going market rate. The situation equates to an unfavorable risk-reward for long bets. The rejection at the Ichimoku Cloud on April 2 resulted in a substantial sell-off, pushing BTC below $75K, mirroring a similar pattern that followed the February 21 rejection. Thus, the latest interaction with cloud resistance warrants close monitoring for the potential return of selling pressure. A downturn from this resistance level would shift attention back to the $75K mark. On the contrary, a potential move beyond $90K, marking a breakout above the cloud, would signal a resumption of the broader bull run and a rally to record highs.

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