Bitcoin prices are at a crossroads, either ready to fall into the pit of the bear market, or explode and show the world that the bull race is not yet officially over. But which one is it? No one really knows, but a technical pattern and the psychology behind it can reveal potential results ahead of time.
What could confirm a potential bull flag formed on a daily basis, and ultimately what could be the checked flag of the current market cycle? Let’s examine the bullish chart pattern.
What is a bull flag? Bitcoin’s price pattern marks new all-time highs
Technical analysis is the study of chart patterns, sequences, candles, indices, pendulums, and more. Research is used to increase profits by using statistics to increase the likelihood of results. This can be different from finding the target price for the sale of assets, or looking for support and resistance.
A bull flag has a bullish chart pattern and a potential structure in the daily BTCUSD price chart. It’s hard to say that Bitcoin’s price action is bullish right now, considering that it was trading at 65 65,000 just a few months ago, but the pattern fits the shape.
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The pattern is characterized by a long sharp step that forms a flag “pole” and then merges into a channel that represents the flag itself. Bull flags are often seen diagonally downwards, as the pattern gives the bears the misconception of winning, making these traders realize they were wrong.
Will the bull flag pattern confirm? | Source: CME BTC1! on TradingView.com
The psychology behind the chart pattern breakout
Bears certainly seem to be in charge of bitcoin price action, but bulls can prepare for bears with bull flag patterns and short press breaks.
Bull Flag Psychology Perfect Setup: Caused by buying a pole bullish and covering shorts. At local highs, prices are repeatedly rejected by low highs and low lows. The bears celebrate but are complacent, even adding to losing short positions.
Related Reading | Why Bitcoin Bears Can’t Buy New Low
When bulls are hand upwards, the resulting breakout is often stronger than the pole, as more shorts accumulate on the one who puts more orts in the wrong position during the pattern.
Bitcoin is currently valued at $ 43,000, and if the pattern is valid, the target will be closer to $ 82,000 based on the rules of measurement. Both serious momentum and shorts from buyers are required to re-launch such a strong trend.
Doubling the price from just one price pattern would be similarly shocking for bears and bulls, but it would be accurate based on a variety of factors. For example, the bull flag could be a parabolic base three, or an Elliott wave impulse wave five. This can be a big trap for bitcoin bulls who can get caught on the worse side.
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Featured image from IStockPhoto, chart from TradingView.com