Ichimoku Cloud
Reading & crypto strategies
The Ichimoku Kinko Hyo — "equilibrium chart at a glance" — is a complete technical analysis system developed in Japan in the 1930s. Its five components simultaneously provide information on trend, momentum, support, resistance, and likely price direction.
Ichimoku in 30 seconds
Ichimoku is one of the few indicators that integrates the past temporal dimension (Chikou Span, projected 26 periods back), the present dimension (Tenkan and Kijun), and the future dimension (Senkou A and B, projected 26 periods forward). This extended temporal vision makes it a particularly powerful trend tool in crypto markets.
Its apparent visual complexity conceals a consistent logic: each component is a range midpoint calculated over a different period. Crossovers between these midpoints generate signals, and the cloud (Kumo) forms a dynamic support/resistance zone.
The 5 components
Tenkan-Sen (period 9) — Conversion line
Calculated as the midpoint of the range (highest high + lowest low) over the last 9 periods. The Tenkan is the most reactive line of the Ichimoku — it closely follows price and serves as the first dynamic support/resistance level. Its slope indicates the direction of short-term momentum.
Kijun-Sen (period 26) — Base line
Range midpoint over 26 periods. The Kijun is the "centre of gravity" of the Ichimoku — the market tends to return to it regularly. It serves as a reference for pullback entries in the main trend. A price closing above the Kijun is broadly bullish.
Senkou Span A — First cloud edge
Average of the Tenkan and Kijun, projected 26 periods forward. Forms the first edge of the Kumo (cloud). In an uptrend, Senkou A is often above Senkou B.
Senkou Span B (period 52) — Second cloud edge
Range midpoint over 52 periods, projected 26 periods forward. This is the slowest cloud edge, often the strongest support/resistance. A thick cloud (large distance between A and B) means a robust support/resistance zone.
Chikou Span — Lagging line
The current closing price, plotted 26 periods back. This unique line allows comparison of the current price to market behaviour 26 periods ago. When the Chikou is above past prices, it's an additional bullish signal.
Reading the Cloud (Kumo)
The Kumo is the most visually distinctive element of the Ichimoku. It's the shaded area between Senkou A and Senkou B. Its interpretation is straightforward:
- Price above the Kumo — Uptrend. The cloud becomes support.
- Price below the Kumo — Downtrend. The cloud becomes resistance.
- Price inside the Kumo — Consolidation or indecision zone. Avoid entries.
- Thick cloud — Strong support/resistance, difficult to break through.
- Thin cloud — Fragile zone, a breakout is likely.
Kumo Twist (edge crossover)
When Senkou A crosses Senkou B — visible in the projected future — that's a Kumo Twist. If A moves above B, the cloud becomes bullish (green); if B moves above A, it becomes bearish (red). This predictable color change 26 periods ahead is an anticipatory signal of a trend change.
Main signals
| Signal | Condition | Strength | Bias |
|---|---|---|---|
| Bullish TK Cross | Tenkan crosses Kijun upward | Strong if above the Kumo | Bullish |
| Bearish TK Cross | Tenkan crosses Kijun downward | Strong if below the Kumo | Bearish |
| Bullish Cloud Breakout | Price closes above the Kumo | Major signal | Very bullish |
| Bearish Cloud Breakout | Price closes below the Kumo | Major signal | Very bearish |
| Chikou above past prices | Lagging line surpasses past prices | Confirmation | Bullish |
| Kijun pullback | Price retests Kijun in uptrend | Entry signal | Pullback buy |
Three TK Cross classifications
Ichimoku himself classified TK Crosses into three categories based on their position relative to the Kumo: Bull Cross above the Kumo (strongest signal), Neutral Cross inside the Kumo (weak signal, high caution), Weak Cross below the Kumo (counter-trend signal, very risky).
Adapting to crypto markets
Ichimoku was developed for Japanese markets that, unlike crypto, close on weekends. This creates debate about which parameters to use in crypto:
- Original parameters (9-26-52) — Designed for 6-day trading weeks. Some adapt for crypto's 7/7 by using (10-30-60).
- Recommended timeframes — Ichimoku works best on H4, daily, and weekly TFs. Avoid timeframes below 1h.
- Adaptations for altcoins — Being more volatile, altcoins often break through the cloud more easily. Reinforce confirmation with RSI or volume.
Practical strategies
Cloud Bounce strategy (with trend)
In an uptrend (price above the Kumo), wait for a pullback to the cloud's upper edge. Enter on the bounce off this support, with a stop below the cloud's lower edge. Initial target: the previous high. This is one of Ichimoku's cleanest strategies.
TK Cross + Chikou strategy
Only enter a bullish TK Cross if the Chikou Span is also above the corresponding past prices. This double confirmation significantly reduces false signals. Place your stop below the Kijun and target the next resistance level or the future Kumo edge.
Ichimoku + RSI (filtering)
Combine Ichimoku with the RSI to filter entries: bullish TK Cross + RSI between 40 and 60 (neither overbought nor oversold) provides the best probability of an extended move. A TK Cross with the RSI already at 75+ has much less potential.
Ichimoku on CrypView
CrypView integrates the complete Ichimoku (Tenkan 9, Kijun 26, Senkou A, Senkou B 52, Chikou) with dynamic colored cloud. Calculations run via Web Worker to keep the interface smooth on large datasets.
- Right-click → Indicators → Ichimoku Cloud
- The cloud appears directly on the main chart
- Preferably choose H4, Daily, or Weekly timeframe
- Combine with RSI for filtered entries (shortcut
Shift+R)
See the documentation Wiki for more details on parameters.