Bitcoin (BTC)’s recent price hold above $30,000 appears to be in the form of a technical analysis pattern called “bull flags.”
“Bitcoin is digesting gains in a correction phase. A ‘bull flag’ may be forming, above the weekly ‘Ichimoku Kinko Hyo’ cloud near $31,900. It will be done when it exits,” analysts at technical research firm Fairlead Strategies wrote in a July 3 note to clients.
A bull flag is a chart with poles and flags. The pole represents the initial price rally and the flag represents the subsequent correction due to the temporary exhaustion of bullish sentiment and the absence of strong selling pressure.
According to technical analysis theory, when an asset breaks the flag, it tends to rise by roughly the length of the pole. Breaking through the top edge of the flag guarantees a breakout.
For Bitcoin, a move from a low of $24,770 on June 15 to a high of $31,441 on June 23 represents a pole, and a subsequent correction represents a flag. Together they represent the flag.
According to Fairlead, if BTC breaks out of the flag, the focus will shift to the next resistance of $35,900.
｜Translation: CoinDesk JAPAN
｜Editing: Toshihiko Inoue
｜Original: Bitcoin May Be Forming a ‘Bull Flag’ on Price Chart: Technical Analysis
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