Bitcoin (BTC) could extend its recent rally toward $98,000 after breaking above a bull flag pattern, a technical formation that suggests a continuation of the prior upward trend. This move was accompanied by a significant unwinding of bearish positions, adding momentum to the asset's advance.
On Sept. 21, Bitcoin surged more than 5%, reaching an intraday high near $85,285. This price action decisively broke above the upper trendline of a bull flag visible on the daily chart. The pattern formed after Bitcoin rallied almost vertically from approximately $62,500 in August to above $81,000, creating the vertical "flagpole" portion of the setup. Following this initial rise, the price consolidated between two downward-sloping trendlines, forming the "flag" section. Monday's advance confirmed an upside breakout from this consolidation range.
Traders typically calculate upside targets for such patterns by adding the height of the preceding flagpole to the breakout point. In this case, the flagpole measures roughly $18,000 to $19,000. Adding that distance to the breakout region around $79,000 to $80,000 places the technical target near $98,000, which is approximately 15% above current prices.
Bitcoin has also moved comfortably above its major daily exponential moving averages. The 20-day EMA sits near $78,633, while the 50-day EMA is around $74,929. The 100-day and 200-day EMAs are positioned near $72,286 and $73,477, respectively. However, the daily relative strength index has risen to around 72, entering technically overbought territory. This condition raises the odds of a temporary dip or sideways trading session before prices climb again. A drop back below the flag structure, especially under the 20-day EMA, would undermine the bullish outlook.
The breakout coincided with an aggressive liquidation of bearish derivatives positions. Over the past 24 hours, approximately $431.74 million in leveraged crypto positions were liquidated. Of that total, $384.71 million came from short positions, compared with just $47.03 million in long liquidations. Shorts accounted for roughly 89% of all liquidations, with short liquidations more than eight times larger than long liquidations.
As Bitcoin pushed beyond the $82,000 to $82,300 resistance area, forced short covering likely added buying pressure and helped accelerate the move toward $85,000. The broader macro environment offered additional support on Monday. Oil prices declined, easing some inflation concerns and helping Treasury bonds recover, while global equities advanced.