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Analysts explained that a breakout from the bull flag pattern could send Bitcoin surging towards an all-time high of $77,000.
Bitcoin has recently formed a bull flag pattern
new post At X, analyst Ali discussed the bullish flag that has recently formed in the cryptocurrency’s 4-hour price. The term “bull flag” here refers to a technical analysis pattern that, as the name suggests, looks like a flag on a pole.
This pattern involves a sharp uptrend followed by a period of consolidation to the downside. The uptrend supplements the pole and the consolidation period acts as a flag.
If price is trapped inside the flag, it will tend to find resistance at its upper line, so upside may form there. Similarly, the bottom line acts as a support, making it easier to shape the bottom.
A bull flag is usually considered to be a continuation pattern, meaning that the prevailing trend (i.e. the flag trend) continues even after the consolidation period ends.
This occurs when a resistance line is broken out. The uptrend that emerges from such a break can be as high as the pole. However, if the asset falls below the support line, the pattern may be considered invalid.
Similar to the bull flag, there is also the bear flag pattern, which works similarly except for the fact that the pole in this case corresponds to a downtrend and the flag is generally an upward consolidation channel. Similar to a bullish flag, a continuation of the prevailing bearish trend is likely to follow this formation.
Well, this is a chart shared by Ali that shows a bullish flag indicating that BTC’s 4-hour price has recently been consolidating internally.
Looks like the price of the asset has been breaking out of this pattern recently | Source: @ali_charts on X
From the graph, we can see that the 4-hour Bitcoin price appears to be consolidating within this bullish flag for the past few days. It is also clear that over the past day, BTC has risen above the pattern’s resistance line.
This could mean that the cryptocurrency is preparing to emerge from this formation. Naturally, the asset will need to show further momentum before a breakout is confirmed.
“If BTC sustains above $70,000, it could rise nearly 10% to reach an all-time high of $77,000,” Ali says. The analyst chose this target because the swing would be the same length as the pole that was in front of this flag.
BTC price
Bitcoin is on track to give more credence to the breakout so far as its price has broken through the $71,300 level. This rally means BTC investors have enjoyed gains of over 7% over the past week.
The price of the asset appears to have surged over the past 24 hours | Source: BTCUSD on TradingView
Featured image from Shutterstock.com, chart from TradingView.com
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