Ichimoku Cloud
Ichimoku Cloud is a five-line indicator that shows trend, support and resistance, and momentum on one chart. It was developed in Japan in the 20th century.
How it works
It has five lines, with standard settings of 9, 26 and 52. Tenkan-sen is the midpoint of the 9-period range, Kijun-sen of the 26-period range. Senkou Span A is the average of Tenkan and Kijun, Senkou Span B is the midpoint of the 52-period range; both are shifted 26 periods ahead and form the cloud (Kumo). Chikou Span is the close shifted 26 periods back.
The basic read: price above the cloud means an uptrend, below means a downtrend, inside means no clear direction. A thick cloud acts as strong support or resistance, a thin one breaks more easily. A Tenkan/Kijun cross is used as a signal, especially when it agrees with where price sits relative to the cloud.
The 9/26/52 settings were designed for an old Japanese market with a six-day trading week. Some traders adjust them for crypto, which trades 24/7, but the standard is still the most common. Ichimoku works best in trends and poorly in ranges.
Over the last 9 days BTC's high was $64,000 and low $60,000, so Tenkan = (64,000 + 60,000) / 2 = $62,000. Over 26 days the high was $66,000 and the low $56,000, so Kijun = $61,000. Tenkan above Kijun and price at $63,000 above the cloud describe an uptrend.
The mistake is using all five lines as separate signals and trading every cross. In a range the lines tangle constantly and you get a string of losses. First use the cloud to decide whether there is a trend at all, then trade only in its direction.
Questions and answers
What is the Ichimoku Cloud in simple terms?
It is the zone between two lines shifted forward in time. If price is above the cloud, the trend is considered up; below it, down.
What are the best Ichimoku settings for crypto?
The standard 9/26/52 is still the most popular. Some traders double the values because crypto trades around the clock, but there is no setting that is best everywhere.
Does Ichimoku work in a range?
Poorly. When price chops inside or around the cloud, the lines give many false signals.
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Updated: 2026-10-19