Recently, while studying technical indicators, I found that many people are still somewhat unfamiliar with the Ichimoku Kinko Hyo (Ichimoku Cloud), and actually, this indicator is quite powerful. It was developed in Japan nearly a century ago, and its name means "one glance to understand," which indeed provides a fairly comprehensive view of the market.

The core of the Ichimoku Cloud is essentially a combination of several key elements. The Conversion Line is the average of the highest high and lowest low over the past 9 periods, representing the short-term trend direction. The Base Line looks at 26 periods and is used to confirm support and resistance levels. The crossover of these two lines is an important buy or sell signal—when the Conversion Line crosses above the Base Line from below, especially when the price is above the cloud, it’s a buy signal. Conversely, it’s a sell signal.

The Kumo Cloud is the most distinctive part of this indicator. It consists of two lines that represent future support and resistance zones. The thicker the cloud, the stronger it is, making it harder to break through. When the price is above the cloud, it indicates an upward trend; below the cloud suggests a downward trend. There’s also the Chikou Span, which is the current closing price shifted back 26 periods, used to confirm the authenticity of the trend.

Honestly, when using the Ichimoku Cloud for trading decisions, the most critical aspect is the relationship between the price and the cloud, combined with the crossover of the Conversion Line and Base Line. This allows you to see a fairly complete market picture. Of course, its complexity can also be an issue—for beginners, it might be a bit difficult to get started, and it’s less effective in low-volatility or ultra-short-term markets.

However, if you take the time to understand the logic behind the Ichimoku Cloud, it can still be quite helpful for medium- and long-term trading. Recently, BTC has been fluctuating around $80.63K (down 1.07% in 24 hours), ETH at $2.28K (down 2.26%), and NOT has also dropped 4.22%. In this kind of market environment, using the Ichimoku Cloud to determine support and resistance levels becomes especially important. If you're interested, you can check out the charts of these assets on Gate and try applying the Ichimoku indicator.