Bitcoin May Be Forming a 'Bull Flag' on Price Chart: Technical Analysis

Bitcoin's BTC$78,973.00 recent price consolidation above $30,000 seems to be taking the shape of a technical analysis pattern called a "bull flag," a pattern that indicates a further rally is likely to be on the cards.

• "Bitcoin is digesting its gains in a consolidation phase. A bullish flag may be forming and would be completed on a breakout above the weekly [Ichimoku] cloud near $31,900," analysts at technical analysis research provider Fairlead Strategies wrote in a note to clients on Monday.
• A bull flag consists of a pole and a flag. The pole represents the initial price rally and the flag represents subsequent consolidation stemming from temporary exhaustion of bullish sentiment and the absence of strong selling pressure.
• According to technical analysis theory, once an asset has broken through the flag, it tends to rally an amount roughly equal to the length of the pole. A breakout is confirmed once the upper end of the flag is breached.
• In bitcoin's case, the move higher from the June 15 low of $24,770 to the June 23 high of $31,441 represents the pole, while the subsequent consolidation represents the flag.
• A potential BTC breakout from the flag would shift focus to the next resistance at $35,900, according to Fairlead.