Bitcoin (BTCUSD) Technical Analysis: Bullish Flag or Sign of Exhaustion?

Bitcoin appears to be hesitating at current levels as it consolidated in a short-term symmetrical triangle while waiting for the next catalysts.

On the longer-term charts, this can be viewed as a flag or pennant, which is often considered a continuation pattern. In that case, a break past the top around $8,300 could lead to an extension of the uptrend.

The 100 SMA is above the longer-term 200 SMA on this time frame to confirm that the path of least resistance is to the upside. In other words, the rally is more likely to resume than to reverse. The gap between the moving averages is also widening to reflect strengthening bullish momentum.

However, stochastic looks ready to turn lower without hitting overbought levels, indicating that sellers are eager to return. This could lead to a pullback for bitcoin, possibly until the dynamic support around the moving averages.

As of this writing, the 100 SMA is around $7,500 and the 200 SMA is near $7,000 so these levels could hold as near-term support on corrections. A break below these, on the other hand, could mean that a downtrend is taking place.

The next upside targets are located around $9,000-10,000 then at the $12,000 area of interest. Investors could be hoping to book profits at those levels, but upside breakouts could draw more bullish energy in.

There wasn’t much to chew on for bulls last week as market watchers were mostly focused on the SEC decision on the bitcoin ETF applications. Some of these were shelved for a later decision date while the application filed by the Winklevoss twins was denied again.

With that, investors are hoping to get more positive industry updates this week to see the climb sustained. Security troubles like hacking incidents might force a larger retreat but more signs of institutional interest from big names could be enough to spur more gains.

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