Analysis of the cryptocurrency market using the Ichimoku Kinko Hyo method can help identify current behavior and what future price action needs to breach in order for a new bull trend to begin. Much of the cryptocurrency market is experiencing a significant bounce from the massive losses it sustained last week and last weekend. At present, we’ve seen some cryptocurrencies experience greater than +10% moves during the Wednesday trading session.
Cardano’s (ADA) 4-hour chart shows a significant breakout from a dominant reversal pattern head-and-shoulder bottom pattern. At the time of writing this article, Cardano has gained as much as +8.03% on the day against the US Dollar and is outperforming Bitcoin as well, leading Bitcoin by +2%. The near term resistance for Cardano on its 4-hour chart is the top of the Kumo (Senkou Span B). Senkou Span B is the single most challenging area for price to break through on any Ichimoku chart. However, we do see some very positive and bullish conditions on Cardano’s chart. Price is above the Tenkan-Sen and Kijun-Sen, but more importantly, the Chikou Span is above the candlesticks and in open space, indicating a continued and sustained move higher.
It’s hard to believe that almost two years ago, Zcash (ZEC) was trading near $900 a coin. One thing that ZCash has outperformed at more than virtually any other cryptocurrency is it’s strong and consistent ability to create new all-time lows. Put this into perspective: from the all-time high of $876.67 in January 2018, ZCash moved -94.95% lower to end at swing low of $44.30 in February 2019. For 13 months, ZCash dropped. There was a mild recovery for ZCash as it followed the rest of the crypto market higher from February 2019 to June 2019 – but then ZCash got smacked. If you thought ZCash’s move from January 2018 to February 2019 couldn’t get worse – it did. From June to November 2019 ZCash wiped out -82.36% of its value from the June 2019 high. In under five months, ZCash moved from $140.49 to the new all-time low (set just a couple of days ago) of $24.77. Ouch.
The 4-hour Ichimoku chart for ZCash isn’t the most excellent looking chart, but it’s not the worst. If we look at the current most recent volume bars, they’re massive. Easily some of the highest volume bars we’ve seen ZCash push in over three months. We may even see ZCash create a bullish condition on the 4-hour chart that it has been unable to achieve since June: The Chikou Span moving above the candlesticks and trading in open space. It remains to be seen if this horrid looking privacy coin can recover from its present condition.
0x is one of my favorite cryptocurrencies. It also happens to have one of the nicer looking 4-hour charts in the cryptocurrency market. Like almost every other cryptocurrency, 0x is experiencing a bullish break of an inverse head-and-shoulder pattern. But 0x has many other bullish conditions that the above cryptocurrencies don’t. First, we can see that the Tenkan-Sen is above the Kijun-Sen with price above both. Second, price is outside of the cloud and trading higher. Third, the Future Cloud is green (Future Senkou Span A greater than Future Senkou Span B). The only other condition that 0x is waiting for to achieve an ideal Ichimoku breakout trade is for the Chikou Span to move above the Cloud. Once that occurs, we should see a sustained drive higher.