Bitcoin (BTC) continues to traverse up and down with no big moves in either direction. However, the clouds are starting to gather as something big takes shape just over the horizon. Is this the storm that is going to send Bitcoin into its final blow-off top stage, or will it send the price crashing into the next bear market? Bull flags are bullish When Bitcoin has been going sideways for around three weeks in a bull flag pattern that is much smaller than the previous flag that took around six weeks to break, it is probably time to sit up and start taking notice. A bull flag pattern says it all in the name - it's bullish. Also, it’s a bull flag pattern that has formed at the back end of this bull market cycle. The probabilities of this breaking to the upside are pretty good. $BTC price back inside bull flag Source: TradingView The 4-hour chart for $BTC shows how the price has now crept its way back into the bull flag after many traders were undoubtedly liquidated due to the sweep down to $112,000. Be that as it may, this test of the $112,000 horizontal support laid a foundation down, confirming it as an important price structure level. The W pattern, which looked as though it might break out, refused to do so, and the price was stopped in its tracks and rejected at the neckline. That said, there is the possibility that the price has another go at the neckline, and a W pattern could still play out, albeit not the original one. RSI points to potential huge move Source: TradingView The daily chart illustrates how the price has been bouncing from the 50-day SMA, and how it has spent the last three days consolidating inside the bull flag. The Relative Strength Index (RSI) at the bottom of the chart provides a bullish possibility. Looking left, it can be seen that when the indicator line last broke through the yellow moving average and the descending trendline, the price action moved up 25%, corresponding to a move of nearly $25,000. If the indicator line can angle upwards and break through these two barriers again, a move of a similar magnitude could begin. The indicator line will need to be watched very closely. Inverse head and shoulders pattern Vs Stochastic RSI indicators Source: TradingView The weekly chart shows the inverse head and shoulders pattern that could provide the signal for this next stage of the bull run. As can be seen above, the $BTC price broke through the neckline of this pattern, came back to confirm the breakout, and all being well we could see a lift-off from here. Running contrary to this very bullish looking candle pattern, the Stochastic RSI at the bottom of the chart reveals that the indicator lines are breaking back down. If they are going to head back to the bottom, this would likely negate the inverse head and shoulders pattern. These indicators need to turn back around and the 50.00 level could provide the support where this takes place. Indicator lines need to be watched like a hawk. 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.
