Just over a couple of weeks since the Bitcoin price was last at the top of the bear flag, it is now practically at the bottom. Was this the last action within this bear flag before it breaks down, or do the bulls still have the potential for a huge rally?
Series of lower highs and lower lows remains unbroken
Source: TradingView
From the midpoint of the bear flag (dashed line) to practically the bottom trendline of the bear flag took the $BTC price less than two days, and with that, more than $5,000 was wiped from the price. Can the bulls still remain in the flag?
A further problem for the bulls is that a lower low was made. This series of lower highs and lower lows has been unbroken since the very top of the last rally back in early May.
As the price has fallen from the top of the bear flag it has chopped up and down within a descending channel, although the top of the channel still only has two touch points. It’s worth noting that descending channels would normally break to the upside. Could this channel even be taken as a bull flag?
Another factor to take into consideration is that the $BTC price is becoming quite oversold. That’s not to say that there can’t be more downside, but the probabilities are that the price also having dropped to the bottom of the descending channel, and the bear flag, Thursday would likely be a good day for some sort of a bounce.
100-day SMA acts as support while bull flag materialises
Source: TradingView
Previously on the channel we have discussed the interactions of the 200-day SMA and the 50-day SMA, whereas on Thursday it is the turn of the 100-day SMA to come into the picture. It can be seen in the above chart that the 100-day SMA looks to be acting as a support. This could be another very good reason why a bounce could be about to take place.
At the bottom of the chart, the Stochastic RSI indicators have turned down, but they could be ready to bounce back up very quickly.
The bull flag setup can be clearly seen in this time frame, and while it’s not standing straight and proud, and is rather bent over, it still looks to all intents and purposes like a bull flag.
Could the most hated bull rally be about to begin?
Source: TradingView
The weekly time frame reveals that the $BTC price could be at a pivotal point. If the bearish sentiment persists, and this is backed up by a huge 9.66K BTC outflow from the U.S. Spot Bitcoin ETFs, the long-awaited break down out of the bear flag could be about to occur.
Be that as it may, a smaller bull flag within the much bigger bear flag could be instrumental in sending the $BTC price back to the top of the bear flag and all the way up to a major $90,000 resistance level should the full measured move out of the bull flag materialise.
The Stochastic RSI indicator lines are coming back down, but could they bounce at the key 80.00 level? Also, the weekly RSI has the indicator line climbing up from a bottom that hasn’t been seen since the last bear market. Could the indicator line be about to confirm and bounce from the green RSI-based MA line? With perhaps very few investors actually anticipating this next potential move, could this become the most hated rally yet?
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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