There’s a debate raging among bitcoin technical analysts over whether the “bull flag” chart pattern even has a flagpole.
A debate is stirring among bitcoin traders after a chart-reading analyst identified a pattern known as a “bullish flag”, which presupposes a rise of $ 70,000 or more.
The analysis, posted on the Bitcoinist website by Yashu Gola and affirmed by Token Metrics’ Bill Noble, concluded that the bull flag formed last month and that the price of the cryptocurrency is set to burst after a disruption in the past few days.
But when it comes to identifying and interpreting the price chart’s patterns, science is an art, and some practitioners of technical bitcoin analysis say they can’t see the mast needed to complete the picture.
“I disagree that there is a flag pattern because there is no real ‘flagpole’ preceding the consolidation phase that has been resolved to the upside,” Katie Stockton, a technical analyst for Fairlead Strategies, told CoinDesk in an email.
The debate has reached such a fever pitch that it was trending Tuesday on the social-media site Reddit:
The controversy comes as bitcoin continues to attract all kinds of bullish forecasts, from all corners of the market, having rebounded six times since October. Although some analysts have modeled long-term price forecasts of $ 100,000 or even $ 1 million based on a number of methods, few traders are asking for a rise to $ 70,000 in the short term.
According to the original post on Bitcoinist, the cryptocurrency broke its bullish flag pattern on Tuesday, signaling the end of a two-week price consolidation phase and marking a resumption of the broader bullish trend.
According to the graph analysis theory, also known as technical analysis, a flag break signals that an asset is likely to move upwards, approximately on the scale of the previous bull movement, which is known as pole. In that case, the breach created an opening for prices to rise to $ 70,000 or more, according to Gola.
Bill Noble, chief technical analyst at Token Metrics, a cryptocurrency research firm, mainly agreed with Bitcoinist’s posting in an email, saying the pattern looks like a bull flag on the four-hour chart.
“If you look at the four-hour chart, the high flag appears as a parallel channel,” he said. “In my opinion, that makes the pattern very clear.”
“Simply put, the recent consolidation at BTC is a pause that is updated”, according to Noble. “Depending on the time period you use for the measurement, the bullish target for the BTC may be $ 75,000 on the four-hour chart or $ 80,000 on the daily chart.”
However, some analysts say the pattern does not qualify as a bullish flag, and traders are running ahead of themselves in making bold predictions based on it.
The rally seen in the first two weeks of March should have been much steeper or greater in magnitude to qualify as the flagpole, according to Stockton. What appears instead is a mast almost equal to the size of the so-called flag.
“To be a flag, in my opinion, the rally at the beginning of March would have been steeper and new highs would have been registered in relation to the high point of the consolidation phase,” she said.
Gola, when asked about his response to the criticism, told CoinDesk in a LinkedIn chat that the pricing structure looks like a bull flag, even though the mast is not steep enough.
He said the price projection was supported by news this week, including the payment giant Visa’s announcement that it will process transactions on the Ethereum blockchain, along with PayPal’s plan to launch a cryptocurrency checkout service by around 29 million of online merchants. Both were seen as signs of increasing adoption of digital assets, which could be largely beneficial to the bitcoin market.
“I declared my upward bias based on increasing volumes, as the price rose in daily time intervals before entering a consolidation period,” said Gola. “In addition, the bull flag works in combination with support fundamentals, including the most recent announcement from PayPal and Visa. We need to look at all sides. “
“In any case, it is a humble opinion, not a direct statement,” he said.
Even though traders agree that the bullish bitcoin flag appeared on the price chart, there are still doubts as to whether the breach has been confirmed, according to Eddie Tofpik, head of technical analysis and senior market analyst at ADM Investor Services International Ltd. , based in London.
“Minimum of two consecutive UTC closings” are needed above the flag barrier before the breach is confirmed, said Tofpik, and “perhaps more, given the nature of the market”. A “UTC close” refers to the bitcoin price at midnight, coordinated universal time. As global cryptocurrency markets are always open, many traders use this time as a way to mark the end of one trading day and the beginning of the next.
A price rejection around the biggest historic high on March 15, just above $ 61,000, could cause a reversal back down, Tofpik said.
Perhaps not a red flag, but at least a yellow one.