- Analysts at Fairlead Strategies noted that Bitcoin has formed a bullish flag pattern.
- In technical analysis, this pattern is one of the best bullish predicters in the world.
- However, it has also formed a double-top pattern.
Bitcoin price has formed a uniquely bullish pattern that could spur a major rally among altcoins like VeChain, IOTA, EOS, and CRO. In a note, analysts at Fairlead Strategies noted that BTC has formed a bullish flag pattern, which is one of the most accurate patterns in technical analysis.
As the name suggests, a bullish flag pattern is characterized by a flag pole and a hoisted flag. This flag is shown in orange in the chart below. At the same time, the coin has remained above the Ichimoku cloud and all moving averages.
All these are bullish catalysts. Therefore, if the price makes a bullish breakout, it Bitcoin price will move to the next key resistance level at $35,000, which is about 12% above the current level.
However, the risk is that this bullish flag pattern has formed close to the highest level this year. As such, this pattern can also be seen as a double top. Notably, the relative volume of Bitcoin remains a bit low. This means that BTC needs to move above the upper side of the flag pattern to invalidate the double-top pattern.
Altcoins to join the rally
Most altcoins have jumped in the past few months because of their association with Bitcoin. Indeed, based on the recent Coinbase and Binance lawsuits, most tokens should be falling since the Securities and Exchange Commission (SEC) said that some were securities.
Instead, altcoins like EOS, IOTA, VeChain, and XRP have jumped because of the strong performance of Bitcoin. BTC rallied because of the recent ETF applications by companies like Blackrock, Invesco, and Ark Invest.
These companies have only filed ETF proposals for Bitcoin and not other altcoins. If it is accepted, they will likely file proposals for other proof-of-work (PoW) coins like Litecoin and Bitcoin Cash.
Therefore, if Bitcoin price jumps above the bullish flag pattern, it will spur a rally of altcoins like EOS, IOTA, XRP, and CRO. The flip side is also true. If the double-top pattern is activated, these tokens will have a deeper dive than Bitcoin.
Read more: How to buy EOS.
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