According to analyst James Stanley, the Bitcoin price has formed a bearish channel after the most recent price drop.
This comes after the Bitcoin price came awfully close to crashing below the $60,000 level earlier this Wednesday.
What's a bear flag?
The bearish flag is a popular trading pattern that typically signals the continuation of a downtrend.
Failing to record any lasting uptrend, the Bitcoin price gets trapped within two parallel trend lines, with bears being determined to push the price lower.
However, it is worth noting that this pattern is far from being infallible: a sudden change in the price trend could invalidate it. If the consolidation phase continues for way too long, sellers might end up running out of momentum. In such a case, the bulls would be able to resume the uptrend.
According to popular cryptocurrency trader Scott Melker, there has been a confirmed bullish divergence on the four-hour chart of the largest cryptocurrency. This might signal that buyers are finally ready to step in.
The silver lining
Still, according to Stanley, there is some hope for the bulls. He has noted that there is "a tone of bull flags" following Bitcoin's rapid ascent to record highs. This means that the uptrend, which has been propped up by record-breaking inflows into Bitcoin exchange-traded funds (ETFs) still has some legs.
Last week, the Bitcoin price reached an all-time high of $73,737.94, according to CoinGecko data.
However, since then, the largest cryptocurrency has given up a large portion of its gains, slipping to as low as $60,913 earlier today.
Earlier today, the Bitcoin price has managed to pare some losses. At press time, it is trading at $64,599.