Source: Cointelegraph
Original: (The 'bull market flag' pattern of Bitcoin (BTC) appears, with conventional profit-taking or possibly new highs)
Key Points:
Traders expect Bitcoin's price to pull back to $90,000, but if profit-taking at the range highs decreases, the bull flag pattern may break through 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 restricted below $104,000 to $105,000 for most of the week, and many analysts have marked this area as a resistance zone. However, another viewpoint is that Bitcoin is merely consolidating within the bull flag pattern.
The bull flag is a continuation pattern characterized by a period of horizontal price consolidation after a sharp upward trend. When the structure is confirmed or breaks through trendline resistance, the upward trend will continue.
Although the flag's range-bound trading section 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 consecutive 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, as well as the open interest indicators, show that traders are selling near the range highs, 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 lows (the bull flag support level), spot buy orders are satisfied, but new longs using margin are still rarely established.
Bitcoin's recent cooling phase is a normal outcome after a nearly 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 highs is also expected.
The short-term holder supply profit and loss data from Glassnode supports this view, as shown in the figure below. This on-chain data company points to profit-taking by short-term traders but explains that this has not exceeded statistical norms, leaving room for further price increases. "Recently, the magnitude of profit-taking by short-term holders has soared to nearly 3 standard deviations above its 90-day average, reflecting a significant increase in profit-taking. Historically, during previous cycles, especially during the push towards historical highs, this indicator has always climbed to over +5 standard deviations or higher. This indicates that stronger profit-taking pressure is typically needed to outweigh the 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 institution Material Indicators states that unless there is a "serious catalytic factor", it is necessary for Bitcoin to conduct an effective support test at $100,000. FireCharts indicates that the order book is preparing for this, with sell orders piling up while buy orders are moving downward.
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", pointing out that Bitcoin's price is stagnating as it approaches historical highs, while the stock market continues to rise after President Trump confirmed 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 remains above $90,000, but this depends on the performance of the U.S. stock market in the short term. "If the stock market experiences a pullback and forms a higher low, I wouldn't be surprised to see Bitcoin undergo a washout in the short term. Given that most stocks have risen 30% to 50% within a single month, this scenario wouldn't seem too extreme."
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