This is a daily technical analysis of Coindesk analyst and chartered market technician Omkar Godbole.
Bitcoin’s
Price diagram shows a well -shaped “bull flag” that suggests a potential outbreak to new life heights that are in line with some dealers’ expectations at a price rally at $ 140,000 and higher.
BTC rose to a record height of nearly $ 111,900 from about $ 74,700 during the six and a half weeks ending on May 22, and has since traded in a mildly declining range and formed the bull flag, according to Charting Platform TradingView. The flag is identified by trend lines connecting the high hit on May 22 and June 9, and the Laven reached June 5 and June 22. Meanwhile, the rod is represented by the original wave.
There is a need for a step over $ 109,000 to confirm the bull’s breakout, which would open the door for a rally to $ 146,000. The level is calculated by adding the length of the rod – the original wave – to the breakout point using a method of technical analysts calling a measured feature.
A bull flag pattern represents countertrend, low -volume consolidation within a narrow range that is prior to a sharp increase. Consolidation tends to be smaller in size and duration than the previous rally, which helps relieve short -term overbought conditions and recharge bulls’ engines for the next leg higher.
“Flag formations occur over a short period – usually a few days to a few weeks,” Charles D. Kirkpatrick wrote in his book, Technical Analysis: The complete resource for technicians in the financial market. “Volume usually falls during the formation of the flag.”
“[However]It is important to be careful to make sure that a complete formation has occurred and to wait for the outbreak, “Kirkpatrick noted.
Flags are continuation patterns and therefore the consolidation is expected to solve in the direction of the previous emergence.
Still, errors may occur in two ways. First, prices can dive out of the flag and mark a bearish reversing. Secondly, a bullish breakout may fail, requiring continuous monitoring of the price action.
That said, according to Kirkpatrick.
“Because these patterns have low failure frequencies, get withdrawals or setbacks, short time periods and steep trends prior to and after their occurrences, they are very good trading patterns,” noted Kirkpatrick.
