Bitcoin bull flag and standard profit taking hint at eventual rally to new BTC price highs

Bitcoin’s price consolidation below $105,000 is interpreted by some analysts as a bull flag, a continuation pattern indicating further upside potential. While the current range-bound trading shows a lack of buy volume, this is viewed by some as insufficient to halt Bitcoin’s momentum.

The recent surge from $74,400 to $105,900 was marked by significant margin liquidations and robust spot volumes, coinciding with substantial BTC ETF inflows and corporate Bitcoin treasury announcements. However, current trading reveals sellers near the range highs, with limited new long positions in both spot and margin markets. Conversely, dips to the range low elicit spot buying, but margin long positions remain scarce.

This consolidation phase is seen as a natural consequence of the recent 40% price recovery and expected profit-taking in futures markets. Glassnode’s data supports this, showing short-term holder profit-taking within historical norms, leaving room for further price appreciation. The data indicates that significantly stronger profit-taking would be needed to overcome the existing buying pressure.

Despite the bullish sentiment, a pullback to test support levels between $90,000 and $100,000 is anticipated by some. Material Indicators highlights potential support at $100,000, with order book data suggesting a setup for such a test. Analyst Daan Crypto Trades agrees, stating $90,000 as a crucial support level. He remains cautiously bullish above this point, but acknowledges the influence of US equity markets, suggesting a potential short-term correction if stocks experience a downturn. The recent rally in stocks following the US-China trade deal adds another layer of complexity to the near-term outlook.

Overall, while the current price action reflects profit-taking, the underlying bullish momentum, supported by on-chain data and corporate activity, suggests a potential breakout to new highs once the consolidation phase concludes. However, a brief pullback to retest support levels is considered a likely scenario.