DISLAIMER – This is in no way shape or form financial advice. By reading this you acknowledge that you’re fully responsible for your investment decisions and the results thereof.
Audius has recently started a formation of a Red Kumo cloud on the daily chart . When using the Ichimoku technical indicator, a Red cloud represents possible bearish sentiment and a further move to the downside. Once a red cloud is formed placing a short trade is often a reliable way to hedge against loses and gain more in the process of a falling market. However, there are a few more conditions.
As can be seen on the chart, the Chikou line (the white line on the chart) needs to be underneath the price candles. Moreover, the Kijun-sen (red line) and the Tenkan-sen (green line) need to be crossed so that the red line lies on top. When all these signals are aligned it’s very likely that a nice short setup can be initiated. I’ll be closely monitoring the formation of a broader cloud and the moving of the green line above or below the red line.
If the signals are met I’ll be entering a short trade:
FIRST TARGET – 1.997 USDT
SECOND TARGET – 1.409 USDT
STOP LOSS – 2.568 (over the top of the red cloud).
Targets are calculated by comparing the Fibonacci levels and the usual Chikou line resistances and supports (see the horizontal yellow lines on the chart).
This setup takes into account the mixed sentiment on crypto in general. By September’s end there’ll be a meeting held between Charles Hoskinson (Caradno’s founder) and many legislators of Washington D.C. in which there’ll be talk about the effects the Infrastructure bill will have on the crypto community. I feel like there’s a bearish cloud looming over all of crypto and feel like the continuing downward momentum of BTC is the start of a larger downward movement which will account for the correction of the huge gains achieved during this past year. If Hoskinson is convincing, maybe we see more uptrend, if not (and if macro issues continue for the overall economy) more trade setups like this will arise.