Bullish Flag Formation Could Take Bitcoin Price Over $10K

By: Michael Harris
Michael Harris
Specialising in economics by academia, with a passion for financial trading, Michael Harris has been a regular contributor to… read more.
on Feb 4, 2020
Updated: May 8, 2020
  • Ex Goldman executive tips Bictoin to be the next big thing
  • Bitcoin price is currently consolidating its recent gains above $9,000
  • Bullish flag formation points towards $10,500

Bitcoin price is consolidating its recent gains above the $9,000 mark. A specific technical formation may take the price over $10,000 in the coming days and weeks.

Fundamental analysis: Ex Goldman executive likes Bitcoin very much

Bitcoin continues to be a hot topic among the investing community. Raoul Pal, former executive at Goldman Sachs, believes that Bitcoin is the next big thing.

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“If I could only own one asset for the next 10 years, it would be bitcoin $BTC. It encapsulates all of my larger macro views and feels like the point on the far horizon we are headed to, in some shape or form. Yes, like gold too and many other things but BTC risk/reward beats all,” said Pal.

Pal is believed to be one of the early investors in Bitcoin as it was reported that he bought the digital coin while it was trading at around $200. In 2017, Pal confirmed that he sold all his crypto assets when the price was trading around $2500.

“For me, I don’t see any reason to hold it. For me, I’m out,” said Pal in 2017.

However, Pal changed his stance on Bitcoin in 2019 again when he said that Bitcoin is worth investing in.

“I know all these macro guys, they’re all in it. They get it. They get the optionality. They may be complete believers, part believers, partial believers. But even then, if it’s a 1% chance of being right and the upside is 100x from here, you’d do this all day,” added Pal.

Technical analysis: Bullish flag to facilitate next leg higher

Bitcoin gained around 15% in the last week of January, which was enough to put the world’s largest digital asset above the key resistance around $9,000. The past week or so Bitcoin has spent consolidating its gains and trading between $9,100 and $9,600.

As seen in the chart below, the price action has formed a bullish flag pattern. This formation is a result of a vertical rise in the price action while the flag results from a period of consolidation. The breakout from a flag often results in a powerful move higher.

BTC/USD daily chart (TradingView)

By measuring the length of the prior flag pole, we have calculated that Bitcoin can travel up to $10,500 in the coming days and weeks if it breaks out of the consolidation phase. The same level also hosts the October high. On the downside, the bulls are still supported by the old resistance, now at $9,000.

Summary

Bullish flag pattern can take Bitcoin price over $10,000 in the coming days and weeks. Should you decide to buy Bitcoin, following a breakout from the consolidation phase, then the $10,500 should be your initial target.

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