Could a Bitcoin Bull Flag Leave Bears Blind
The price of Bitcoin is at a crossroads, either ready to fall into the troughs of a bear market or to take off and show the world that the bull run has yet to officially end. But what is it ? No one really knows, but a technical model and the psychology behind it could reveal the potential outcome ahead of time.
Could a potential bullish flag forming on daily calendars confirm and lead to what is ultimately the checkered flag of the current market cycle? Let’s take a look at the bullish chart pattern.
What is a bull flag? Bitcoin price model targets new all-time highs
Technical analysis is the study of chart patterns, sequences, candlesticks, indicators, oscillators and more. The study is used to improve profitability by using statistics to increase the odds of results. This can range from finding price targets to selling assets to finding support and resistance.
A bullish flag is a bullish chart pattern and there is potentially one forming on the daily BTCUSD price chart. It’s hard to say that Bitcoin’s price action is bullish right now, given that it was trading at $ 65,000 just a few months ago, but the pattern matches the shape.
Related reading | Build a base or a bust? Bitcoin hits parabolic support
The pattern is characterized by a long, sharp movement that creates a flag “pole” followed by consolidation within a channel that represents the flag itself. Bullish flags are often tilted and tilted slightly downward, as the pattern gives bears the false feeling that they are winning, resulting in even greater movement when these traders have realized they were wrong.
Will the bull flag pattern confirm? | Source: CME BTC1! on TradingView.com
The psychology behind the bursting of the graphic model
Bears seem to be in charge of Bitcoin’s price action well lately, but the bulls could be preparing to blind the bears with a breakout of the bullish flag pattern and a short squeeze.
The psychology of the bullish flag is the perfect setup: a pole is caused by bullish buys and short cover. At the local high, the price is repeatedly rejected, making highs and lows lower. Bears celebrate and become complacent, even adding to the loss of short positions.
Related reading | Why Bitcoin Bears Might Not Buy New Lows
When the bulls gain the upper hand, the resulting breakout is often even stronger than the pole itself, as more shorts have built up on that cover, combined with incorrect positions that have built up during the pattern itself. .
Bitcoin’s price is currently $ 43,000, and if the model is valid, based on the measurement rule, the target would be closer to $ 82,000. A serious momentum from buyers and shorts covering both would be needed to revive such a powerful trend.
Doubling the value of a single pricing model would be shocking for bears and bulls, but it would be accurate depending on various factors. For example, the bullish flag touches what could be a parabolic base three, or an Elliott Wave impulse wave five that is just starting. It could also be a big trap for Bitcoin bulls which could be caught in further downside.
Featured image from iStockPhoto, charts from TradingView.com