Potential bull outbreak could overwhelm Bitcoin bears

Bitcoin price is at a crossroads, either ready to fall into a bear market spiral or to explode, showing the world that the bull cycle is not over yet. But in which case specifically? Nobody knows, but a technical and psychological pattern behind it could reveal potential outcomes.

Could a potential bull flag forming in the daily timeframe confirm the current state of the market? Look at the diagram.

Bitcoin Bull flag

Technical analysis is the study of chart patterns, serial sequences, candles, indicators, oscillators, and more. This is to improve profitability by using statistics to increase the likelihood of an outcome, which can vary from finding sales targets to finding support and resistance.

A bull flag is a bullish chart pattern and is likely to form on the daily BTCUSD price chart. It’s hard to say that Bitcoin price action is bullish at the moment as it was trading at $ 65,000 just a few months ago.

This pattern is characterized by a sharp long motion that creates a “flagpole,” followed by consolidation in a channel that represents the flag itself. Bull flags often slope down as this pattern gives the bears the wrong feeling that they are winning.

Source: TradingView

The psychology behind the model

Bears have certainly dominated so far, but bulls could prepare to turn the game around with a bullish flag breakout and short squeeze.

Bullish Sentiment is the perfect setup: a pole created by increased buying pressure and short cover. At the local high, the price is continually declined, creating lower highs and lower lows. The bears were so excited they abandoned their vigilance and even destroyed their short positions.

When the cops get the upper hand, the breakout is usually higher than the flagpole because more shorts have been pushed towards the defender, combined with incorrect positions that have accumulated within the pattern itself.

Bitcoin price is currently $ 41,788 and if the model is valid the target would be closer to $ 82,000 based on the measurement rules. Tremendous momentum from buyers and an overall short position will be a necessary and sufficient condition for such a strong trend to resume.

A doubling in value of just one price pattern will shock both bears and bulls, but it will be accurate based on many factors. For example, the cops are setting up a possible triple parabolic base or the Elliott impulse wave 5 is just beginning. It could also be a big trap for Bitcoin bulls – possibly trapped in a deeper downward spiral.

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Annie

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