Things are heating up for the Bitcoin price with a recent rejection from the top of a bear flag in force since the beginning of February. The battle within this bear flag is absolutely crucial, and will probably decide whether the $BTC price changes trend back to the upside, or whether another leg down will occur.
Strategy buys big, but $BTC rejected from top of bear flag
Source: TradingView
The recent news is that Michael Saylor’s Strategy has just bought big, to the tune of $1.57 billion, with the average price per BTC right at the top trendline of the bear flag. Can the bulls do Strategy a favour?
The 4-hour chart above shows that the $BTC price did pierce through the top of the bull flag, but this was short-lived, and sellers turned this hope into a rejection, leaving a decent-sized candle wick above the bear flag trendline to tell the tale.
Even so, the bulls have managed to continue this rally while short-term momentum indicators are signalling that the price is overbought. As things stand, the price is funnelling into a tightening space between the top of the bear flag above, and an ascending trendline below. The bear flag trendline is the critical boom or bust line here, and breaking and holding above it could potentially change the macro bear trend that Bitcoin has been in since its $126,000 all-time high.
The 4-hour Stochastic RSI indicators are coming down now (bottom of chart), and it will be vital that the bulls keep the price from falling too far while the indicator lines possibly bottom again.
Second bear flag playing out same as the first
Source: TradingView
Into the daily time frame one has a sense of deja vu by looking at the two bear flags. Each one is a classic bear flag, and the second one is not doing anything different to the first one, at least not so far.
It can be seen that the blue 50-day SMA moved into the first flag mid-way along, had the $BTC price climb above it, and then fall below, before the price plummeted out of the bottom of the flag.
This time around, the 50-day SMA has moved inside (mid-way along), and the price has climbed above it. We are perhaps part way through the very same process. Can the bulls avoid the rest of it playing out?
Other signs that the bulls could be fighting a losing battle is that the daily Stochastic RSI indicators have almost reached the top of their limit, signalling an overbought condition, while the indicator line for the RSI, at the bottom of the chart, isn’t far from a touch and confirmation of a powerful descending trendline that began all the way back in November 2024.
Still room in the bear flag for the bulls to do something
Source: TradingView
In the weekly time frame one can see clearly that unless the bear flag is broken to the upside, more downside is probably next. There is room in this bear flag for two more weekly candles, and then the huge major descending trendline comes into play. So if the bulls are going to do something, they have this week, and another two weeks in which to do it.
Out in the macro time frames of the weekly, 2-week, and monthly, the Stochastic RSI looks very positive, with cross-ups from the bottom for all of them. This augurs the future arrival of very strong upside momentum. However, this will not take place until the indicator lines actually cross above the 20.00 level. This does look as though it could happen first in this weekly time frame, but if the $BTC price is rejected from the top of the bear flag, these indicator lines could turn back down.
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.
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