Yesterday we wrote about it: Bakkt can just provide fireworks on the bitcoin market. But it is not there yet. Bitcoin now seems to be defending the EUR 9,000 limit. It can go either way, or as they say in football: the ball is round. Is the value of bitcoin going down, or can we expect an increase?
Can the flag fly out?
It now seems a bit far-fetched, but it is possible that the graph forms a bull flag. A bull flag is a price formation that can lead to a substantial price increase. It consists of two parts:
- First the pole forms. The rate rises almost straight up, after which a top is reached. We have indicated this in the graph with the first green arrow.
- After that, the price moves downwards between two parallel trend lines. We see that happening now.
The course thus forms a flag. That is where the name bull flag comes from.
Is the price rising above the top trend line? Then the flag is off! The expected price increase is then equal to the “pole” of the bull flag. If this scenario comes out, then bitcoin may reach its highest value ever.
Inverse head and shoulders can lead to an increase
In addition, we see a different formation that can lead to a price increase. That is the inverse head and shoulders.
This formation consists of four parts:
- First the first shoulder forms: the course makes a valley. We have indicated this on the graph with the first green ball.
- The head then forms. The course makes a deeper valley, indicated by the second green ball.
- Finally, the second shoulder forms. The rate rises but then makes another valley. This is located approximately at the height of the first shoulder. On the graph you can see that from the third ball.
- But the most important is the neckline. This is the trend line that keeps looking up the course with an inverse head and shoulders. That is the orange line on the graph below.
Does the bitcoin course break above the neckline? Then the bitcoin rate can rise considerably. A possible price target is the earlier summit of 11,800 euros from 10 July.
But .. moving average no longer provides support
We wrote earlier that the 200 moving average on the four-hour chart provides support. You can see that on the graph by the green arrows. But that doesn’t seem to be the case anymore. The line has been changed to a resistor (red arrows).
And that can be negative for the bitcoin rate. If the line remains a resistance, then there is a further fall in the horizon. The low point of last Wednesday (8,100 euros) may then come to the fore again.
Which way is the bitcoin heading?
It is a bit boring, but almost the same zones as last time remain valid in this price analysis. We describe both a positive (bullish) scenario and a negative (bearish) scenario.
Does a combination of the bull flag and the inversed head and shoulders cause a price increase? Then the bitcoin rate must first look up the top of the bull flag (10,800 euros). That is the slanting orange line on the graph.
If bitcoin also rises above that, the rate can prepare itself for an increase towards the “all time high” of bitcoin (around € 16,000).
But if bitcoin drops, the rate will probably look for the bottom of the bull flag. On the graph, that zone is around the yellow rectangle. Bitcoin can then drop to 7,800 euros.
If bitcoin continues to fall after that, the rate will probably find support between 6,000 euros and 6,200 euros.