🔻 Why BTC Might Create a Bearish Flag Pattern
1. Previous Strong Decline (Flagpole – "Pole")
A bearish flag usually forms after a sharp sell-off that creates the basic "pole" of the pattern.
If BTC has recently dropped quickly by several percent (e.g., due to liquidity, below support, due to fundamentals, or a volume sell-off), it starts to look like a potential beginning of a bear flag.
2. Sideways or Slightly Upward Consolidation (Flag)
After the dump, the price often consolidates in a channel sideways or slightly upward – this is the phase when the market gathers liquidity, and retail enters longs believing the market is reversing.
This movement is weak and without volume – it lacks the strength to break back into an uptrend.
3. Volumes Decrease During the Flag
A typical sign of a bear flag is that volume decreases during consolidation – this means that bulls lack the strength to exert more buying pressure.
This increases the likelihood of the trend continuing (down).
4. Market Psychology
After the sell-off, a phase of "hope" occurs – retail enters longs believing that the price will go back up.
Smart money utilizes this phase to enter shorts at better levels, often near previous liquidity zones.
5. Technical Resistance Zone
The flag often hits resistance or a supply zone (e.g., previous support → resistance flip).
Once the price fails to break higher and creates a lower high, it is a signal of weakness.
