Bitcoin Tests 'Cloud Resistance' at $85K, Worsening Risk/Reward Ratio for Bulls: Godbole

Recent Bitcoin price movements have been capped by the Ichimoku Cloud, creating unfavorable risk-reward conditions for bullish traders.

Author: Omkar Godbole | Edited by: Parikshit Mishra Updated: Apr 14, 2025 1:08 pm Published: Apr 14, 2025 12:24 pm

Key points:

• Bitcoin's recent price action has been capped by the Ichimoku Cloud, creating an unfavorable risk-reward environment for growth-oriented traders.
• The cryptocurrency is experiencing strong resistance at around $85,000, while the support level is much lower at $75,000.

This is a daily technical analysis from CoinDesk analyst and certified technical analyst Omkar Godbole.

In financial markets, choosing the optimal entry point is often half the battle, as time and level significantly influence the outcome, distorting the risk-reward ratio in favor of traders.

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While the near-term outlook for Bitcoin (BTC) may appear positive due to increased interest in bullish bets in the options market, the cryptocurrency's proximity to a key resistance level that has capped gains in recent months makes the risk-reward profile for those looking to take advantage of bullish expectations less attractive.

Since Saturday, BTC has been facing the lower boundary of the Ichimoku Cloud at around $85,000. Developed by a Japanese journalist in the 1960s, the Ichimoku Cloud is a technical analysis indicator that provides a comprehensive view of market dynamics as well as support and resistance levels.

The indicator consists of five lines: leading swing A, leading swing B, conversion line or Tenkan-Sen (T), base line or Kijun-Sen (K) and lagging closing price line.

The difference between Leading Span A and B forms the Ichimoku Cloud, the upper and lower boundaries of which serve as potential support and resistance levels depending on the position of the price relative to the cloud. When prices are above the cloud, this signals a bullish trend, while prices below indicate a bearish trend.

In early February, BTC dipped below $100,000, trading under the Ichimoku Cloud. Since then, the lower boundary of the cloud has served as a strong resistance and supply zone, limiting recovery rallies.

With BTC trading at this level again, bulls, especially those looking to enter the market with new bids, may be cautious. The immediate upside may be limited by cloud resistance around $85K, while support is below $75K, which is almost $10K below the current market rate. This creates an unfavorable risk/reward ratio for long positions.