Is Bitcoin (BTC) Ready to Break Out of Its Bull Flag Pattern?

The expected $BTC bounce has materialised and the current price is back above $107,000. However, will Bitcoin bulls have enough in the tank to exit from the top of the bull flag and power higher into price discovery?

Last tussle between bulls and bears

The market awaits, while the bulls and the bears wrestle for dominance. On the side of the bulls is the strong Bitcoin treasuries/ETFs buying pressure, and a very positive chart setup. In favour of the bears is the constant profit-taking of the long-term holders and the OGs who are selling into such strength in order to take some lifestyle chips off of the table.

With low volume being traded on exchanges, given that most $BTC is being sourced over the counter (OTC), this kind of environment is ideal for the major exchanges and market makers to manipulate price. Therefore, it just might be that a potential breakout could be when these big players are good and ready for it.

$BTC bounces from strong support

Source: TradingView

The 4-hour chart for $BTC shows how the price bounced pretty much as expected from one of the strong support levels. This happened to be at $105,400. So far on Wednesday, the price has reached $107,500, which is a notable level of resistance. It might be expected that the bulls eventually push on through this level and come up against the upper trendline of the bull flag. A breakout and consolidation above could then ensue.

If the bears are to spoil the party, they would possibly look to hold the price at the bull flag trendline, or the resistance at $109,000, before forcing the price back down. That said, once a potential breakout has been achieved, coming back to test the trendline before moving higher would be the more likely outcome.

Bullish engulfing candle on daily

Source: TradingView

On the daily time frame things are looking positive. The price is back above the 50-day SMA (blue line), and the current candle is already engulfing Tuesday’s red candle. At the bottom of the chart, the Relative Strength Index shows that the indicator line has bounced off of the yellow moving average at the 50.00 level.

$105,600 support has become important level

Source: TradingView

The weekly chart reveals how the support at $105,600 is becoming an important level, with at least 5 good touches of this line. If the $BTC price can break out on Wednesday, or perhaps later in the week, the Stochastic RSI indicators at the bottom of the chart are likely to angle up and a bullish cross-up would lend fuel to the breakout.

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.