Over the past week, the largest cryptocurrency by market cap, Bitcoin (BTC), has been trading horizontally between $71,600 and $68,400. This consolidation, marked by short-term candles, reflects a lack of decisive action from either buyers or sellers towards this token.
Critical Level in Bitcoin
However, an analysis of the 4-hour chart for the cryptocurrency reveals that this price volatility is the formation of a bullish flag pattern. This could indicate a preparation for the next leap following a post-rally correction. Bitcoin‘s price rebounded after witnessing significant support at the 38.2% Fibonacci retracement level during the last correction in the fourth week of March. The reversal of the bearish trend challenged the $71,500 resistance with a 17.7% increase in the cryptocurrency’s price.
Yet, the price moved sideways below the mentioned resistance, creating a narrow range formation over 4 hours. This horizontal movement also points to a consolidation prior to a halving event. This is because the BTC price could stabilize in anticipation of future events that may lead to increased volatility.
Recovery Process in BTC
Additionally, the technical chart indicates that this range formation is the development of a bullish flag pattern. This structure allows buyers to regain strength before continuing the recovery trend. Senior cryptocurrency analyst Ali suggests in his latest analysis that the Bitcoin accumulation trend score could show a strong accumulation pattern even if the cryptocurrency consolidates near its all-time highs.
The leading cryptocurrency, Bitcoin, is currently trading at $70,576, marking a 1% intraday gain. With a renewed potential for higher recovery, it is likely that the BTC price could breach the upper trend line of the pattern; a breakout could see the rally reaching $73,800 and then potentially $81,700.
