Blockchain and Cryptocurrency Beginner - Relationship Between Kumo Cloud and The Price Movement and How to Determine Resistance and Support Levels Using Kumo

Relationship Between Kumo Cloud and The Price Movement

The relationship between the kumo cloud and price movement is that the when the kumo cloud is below the price, it becomes the support and signals that the price is bullish. Also when the kumo cloud is above the price, it becomes the resistance and signals that the price is bearish.

The colour of the kumo cloud is also a great indicator of the price movement. When the kumo cloud is red, it is an indication that the price movement is bearish, and when the kumo cloud is green, it is an indication that the price movement is bullish.

The Kumo cloud determines dynamic support and resistance areas based on the price movements. When the market is in an uptrend, the longer the price stays higher than the kumo cloud. When the price is in a downtrend, the longer the price stays lower than the kumo cloud. In other words, the price movement is either uptrend or downtrend depending on whether the kumo cloud is below or above the price.

Also, the size of the kumo cloud indicates whether the support or resistance is strong. A wide kumo cloud indicates the strength of the support or resistance. On the other hand, a thin kumo cloud indicates the weakness of the support or resistance.

How to determine resistance and support levels using Kumo

To determine resistance and support levels using kumo, there are few factors that have to be taken into consideration.

On the chart, the position and level of the kumo cloud in relation to the price is one of the factors that is taken into consideration when determining support and resistance. Kumo cloud determines dynamic support and resistance areas based on the price movements. When the market is in an uptrend, the longer the price stays higher than the kumo cloud. When the price is in a downtrend, the longer the price stays lower than the kumo cloud.

The colour of the kumo cloud is also another factor to consider in order to determine support and resistance.

Flat tops and flat bottoms in the kumo cloud is also another factor to consider when determining resistance and support on a chart. To use this, place a horizontal line on the flat tops and flat bottoms to clearly see the level of support and resistance.

BTC/USDT chart

The thickness of the kumo cloud is also another factor to consider when determining level of support and resistance. The thicker the kumo cloud, the stronger the support or resistance level.

BTC/USDT Chart

BTC/USDT Chart