Why Bitcoin, Ethereum May Be Fueling Up To Skyrocket: What To Watch For

Bitcoin BTC/USD and Ethereum ETH/USD have all settled into bullish flag patterns on the daily chart. The bull flag pattern is created with a sharp rise higher, forming the pole, which is then followed by a consolidation pattern that brings the stock or crypto lower between a channel with parallel lines or when the crypto trades sideways into a tightening range that forms a triangle.

• For bearish traders, the "trend is your friend" (until it's not) and the crypto may continue downwards or sideways within the following pattern for a short period of time. Bears may want to enter the trade if the crypto drops through the bottom of the consolidation pattern. Aggressive traders may decide to short the stock at the upper trendline and exit the trade at the lower trendline.
• Bullish traders will want to watch for a break upwards from the upper descending trendline of the flag formation, on high volume, for an entry. When a stock or crypto breaks up from a bull flag pattern, the measured move higher is equal to the length of the pole and should be added to the lowest price within the flag.

A bull flag is negated when a stock or crypto closes a trading day below the lower trendline of the flag pattern or if the flag falls more than 50% down the length of the pole.

See Also: Crypto Analyst Michaël van de Poppe Says Bitcoin Will Hit This Six-Figure Price After Blowing Past $63,000

The Bitcoin Chart: Bitcoin has a bull flag on the daily with the pole created between Oct. 4 and Oct. 6 and the flag between Thursday and Saturday.