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

A bullish flag looks to be forming and would be completed on a breakout above $31,900, analysts at Fairlead Strategies said.

AccessTimeIconJul 4, 2023 at 11:26 a.m. UTC

Bitcoin's (BTC) 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.

Edited by Sheldon Reback.

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Omkar Godbole

Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team.