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This Pattern Shows Bitcoin Bulls Might Be in Trouble

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Fri, 11/11/2022 - 9:19
This Pattern Shows Bitcoin Bulls Might Be in Trouble
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Bitcoin, the leading cryptocurrency by market capitalization, has formed the bear flag pattern on its four-hour chart, according to Jake Wujastyk, vice president of strategic growth at TrendSpider.

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The aforementioned candlestick chart pattern, as its name suggests, consists of a flag and a flagpole.

Bear flags are typically formed during consolidation phases that come after a significant rebound.

The flagpole represents a series of higher highs and higher lows that are formed within a consolidation channel. The pattern is then formed if the price breaks below a newly established support level. Such a formation indicates that bears are stepping up selling pressure after a brief consolidation phase.

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However, it should be noted that bears might lose their momentum if the consolidation phase drags on for too long.

Bitcoin recently suffered devastating losses due to the FTX disaster, plunging to a two-year low of $15,632 on Wednesday. On Thursday, however, the largest cryptocurrency rebounded sharply after the most recent consumer price data (CPI) data surprised to the downside. The U.S. stock market saw a blowout rally after cooler-than-expected inflation substantially increased the odds of a much-awaited Federal Reserve pivot.

While the macroeconomic data paints a bright picture for risky assets, the Bitcoin price remains on the ropes amid the crypto industry's worst crisis in years. The sudden collapse of the FTX empire remains a major bearish headwind.

Earlier today, Bitcoin retraced back below the $17,000 level, currently trading at $17,311.

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