An analyst explained that a breakout of a bull flag pattern could see Bitcoin reach a new all-time high of $77,000.
Bitcoin has been forming a bullish flag pattern recently
In a new publish on X, analyst Ali discussed a recently formed bull flag in the cryptocurrency’s 4-hour price. O “bull flag” here refers to a technical analysis pattern that, as its name implies, looks like a flag on a flagpole.
In this pattern, a sharp upward trend is followed by a period of downward consolidation. The uptrend offsets the pole, while the consolidation period acts as a flag.
When the price is stuck inside the flag, it tends to encounter resistance at its upper line, so tops are likely to form there. Likewise, the bottom line can serve as support, thus facilitating the formation of the bottom.
The bull flag is generally considered a continuation pattern, meaning that the prevailing trend (i.e., the flag trend) would continue when the consolidation period ends.
This happens when a break above the resistance line occurs. The uptrend that emerges from this breakout could be the same height as the pole. However, if the asset falls below the support line, the pattern may be considered invalidated.
Just like the bull flag, there is also the bear flag pattern, which works in a similar way, except that the pole in this case corresponds to a downtrend, while the flag is usually an upward-sloping consolidation channel. Just like the bull flag, a continuation of the prevailing downtrend could follow this formation.
Now, here is the chart shared by Ali that shows the bull flag that BTC 4-hour price has been consolidating recently:
Looks like the price of the asset has been breaking out of this pattern recently | Source: @ali_charts on X
From the chart, it is visible that the 4-hour Bitcoin price appears to have consolidated within this bull flag over the past few days. It is also evident that over the last day, BTC has risen above the resistance line of the pattern.
This could mean that the cryptocurrency is preparing a breakout from this formation. Naturally, the asset would have to show more momentum before the skirt can be confirmed.
“If BTC holds above $70,000, we could see a nearly 10% increase to a new all-time high of $77,000!” says Ali. The analyst chose this target because such a swing would be the same length as the flagpole that preceded this flag.
BTC Price
So far, Bitcoin has been moving in a direction that would add more credibility to the breakout, as its price has already surpassed the $71,300 level. With this increase, BTC investors would be making profits of over 7% last week.
The price of the asset appears to have surged over the past 24 hours | Source: BTCUSD on TradingView
Featured image from Shutterstock.com, charts from TradingView.com
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