Source: Cointelegraph
Original: “Bitcoin (BTC) 'Bull Flag' Pattern Emerges, New Highs Possible After Standard Profit-Taking”
Key Points:
Traders expect Bitcoin's price to pull back to $90,000, but if profit-taking at the range's high decreases, the bull flag pattern may break out to new highs.
On-chain data indicates that the current profit-taking is too weak to extinguish Bitcoin's current price momentum.
Bitcoin's price has been largely restricted below $104,000 to $105,000 this week, with many analysts marking this area as a resistance zone, while another view suggests that Bitcoin is merely consolidating within a bull flag pattern.
A bull flag is a continuation pattern characterized by a period of sideways price consolidation following a sharp upward trend, where the upward trend will continue once the structure is confirmed or breaks through the trendline resistance.
While the range-bound trading of the flag is seen as a representation of indecision between buyers and sellers, in this case, the lack of buying volume is the main reason. As shown in the TRDR.io chart below, Bitcoin's explosive move from $74,400 to $105,900 was accompanied by significant liquidations in the margin market and strong spot trading volume, consistent with billions of dollars in spot Bitcoin ETF inflows over several days.
During these three weeks, several U.S. and international companies also announced plans to purchase Bitcoin and establish Bitcoin reserves. The difference in cumulative trading volume between spot and futures on the chart, along with the open interest indicator, shows that traders are selling near the range's high, while there is a lack of new long leverage and large-scale spot positions being established in this area. In contrast, when prices drop to the range's low (the bull flag support), the buy orders on the spot side are being filled, but there is still little use of margin to establish new longs.
Bitcoin's recent cooling phase is a normal result after nearly a 40% rebound that began on April 8, and the loss of upward momentum due to profit-taking in the futures market at the current range high is also expected.
Glassnode's data on Bitcoin short-term holder supply profit and loss supports this view, as shown in the chart below. This on-chain data company pointed out the profit-taking by short-term traders but explained that it has not exceeded statistical norms, leaving room for further price increases. "Recently, the extent of profit realization by short-term holders has surged to nearly 3 standard deviations above its 90-day average, reflecting a significant increase in profit-taking. In past cycles, especially during the push towards historical highs, this metric has typically climbed to over +5 standard deviations or higher. This indicates that stronger profit-taking pressure is usually needed to overwhelm inflow demand."
After absorbing most of the apparent selling liquidity during Bitcoin's move to $105,000, some analysts warned that the next step for Bitcoin's price may be a brief dip to the $100,000 to $90,000 range to test support.
Bitcoin market liquidity research firm Material Indicators stated that unless there is a "serious catalyst,"… Bitcoin needs to effectively test support at $100,000, with FireCharts showing that the order book is preparing for this, with sell orders piling up while buy orders are moving down.
Analyst Daan Crypto Trades shared his views with fans on the X platform, stating that most bullish and bearish factors that could affect Bitcoin's price movement have "become clear." He noted that Bitcoin's price is stagnating near historical highs while the stock market continues to rise following President Trump's confirmation of the U.S.-China trade agreement.
The analyst stated, "90,000 remains my long-term bottom line for holding spot positions," adding that he maintains a "cautiously bullish" stance as long as the price stays above $90,000, but this depends on the performance of the U.S. stock market in the short term. "If the stock market pulls back and forms a higher low, I wouldn't be surprised to see Bitcoin experience a washout in the short term. Given that most stocks have risen 30% to 50% within a month, this scenario wouldn't seem too extreme."
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