Will Bearish Flag pattern extend BTC correction?

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The Bitcoin price witnessed a short-term bull rally resonating in the inverted Flag pattern channel. However, the recent sell-off in the crypto market has sunk the coin price to shared support of ascending trendline and $40000. The decreasing volume activity suggests a bullish reversal to the $45000 mark.

Key points: 

  • The BTC price would maintain a weekly closing above the $40000
  • The inverted Flag pattern governs the BTC price action
  • The intraday trading volume in the Bitcoin is $16.6 Billion, indicating a 12.5% lost

BTC/USDT ChartSource-Tradingview

Responding to the bearish flag pattern channel, the Bitcoin price plunged below the $45000 support on April 6th. This level acted as a crucial resistance last quarter, and a bear trap mounted on its breakout triggered a significant sell-off last week.

The BTC/USDT price dropped to the $40000 psychological support level during the freefall, registering a 10% fall. However, the ascending trendline aligned with the $40000 support, prevented a further loss, and coiled the price action in a minor consolidation.

The inverted flag is a downtrend continuation pattern that intensifies the selling momentum if the coin price breaches the dynamics support trendline.

Conversely, If the Bitcoin price sustains above the $40000 mark, the buyers may trigger another bull cycle to reach the overhead resistance. Furthermore, until the support trendline is intact, the market participant can maintain a short-term bullish trendline.

  • Resistance level- $45000, $48100
  • Support level- $40000, $36400

Technical indicator-

EMAs: The 50, 100, and 200-day EMAs are moving flat, indicating a range-bound rally for BTC. However, the coin price is trading below these EMAs, and with bearish crossover among the 20-and-50-day EMA suggests the sellers hold the advantage.

MACD indicator: The MACD and signal line dropped below the neutral zone due to the recent bear cycle. However, the decreasing red bars on the histogram chart undermine the selling momentum.

Disclaimer

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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