Bitcoin (BTC) rose out of its bull flag on Thursday, and for all intents and purposes looked as though it might be able to consolidate above. However, the bears had other ideas, and not only forced the price back to the upper trendline, but drove it back inside the flag. Is this just a postponement of the breakout, or could the price be brought lower still?
Source: TradingView
The short-term chart for $BTC shows a fakeout of the bull flag. When the price was over $110,000 on Thursday this was probably the last thing that the bulls expected. That said, $BTC was becoming overbought, and once the first breakout confirmation had been made, and the price rolled over again, the bulls suddenly lost their nerve and the price receded back into the bull flag.
One further bearish factor that will give the bulls food for thought is that the surge out of the bull flag did not put in a higher high. It got pretty close, but pretty close still isn’t a higher high.
On the more positive side of things, the overbought condition for $BTC is resetting as the Stochastic RSI indicators on the 4-hour time frame have now hit the bottom. Having said that, the 8-hour and 12-hour Stochastic RSIs still have a way to go, and might even start turning up before they get to the bottom.
Source: TradingView
The daily chart reveals that the price is still above the $106,000 support. This is an important level because it marks the top of some candle bodies from December 2024 through to January 2025. If this level continues to hold, the breakout and fakeout of the bull flag could just be a momentary setback.
Source: TradingView
The 4 of July holiday in the United States may have had something to do with the lacklustre trading of $BTC on Friday. Be that as it may, looking at the macro picture, the surge out of the falling wedge pattern has turned into a classic bull flag, and it might be expected that this plays out to the upside, even if it does take a while longer.
At the bottom of the chart, the Stochastic RSI indicators are still sitting on a knife edge. Any positive or negative price action over this weekend could tip the scales in either direction. The ideal situation for the bulls would be for a confirmed cross back up at the end of Sunday. If this doesn’t take place, expect at least another week of sideways price action.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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