Bitcoin (BTC) could extend its latest rally toward $98,000 after breaking above a bull flag pattern, with a massive short squeeze adding momentum to the bullish technical setup.
Bitcoin Bull Flag Breakout Targets $98K
Bitcoin surged more than 5% on Sept. 21, reaching an intraday high near $85,285 and decisively breaking above the upper trendline of a bull flag visible on its daily chart.
The pattern emerged after BTC rallied almost vertically from around $62,500 in August to above $81,000, forming the “flagpole.” Bitcoin subsequently consolidated between two downward-sloping trendlines, creating the flag portion of the setup.
Monday’s advance confirmed an upside breakout from this consolidation range.
Bull flags are generally considered bullish continuation patterns. Traders typically calculate the upside target by adding the height of the preceding flagpole to the breakout point.
In Bitcoin’s case, the flagpole measures roughly $18,000-$19,000. Adding that distance to the breakout region around $79,000-$80,000 puts the technical target near $98,000, or roughly 15% above current prices.
BTC has also moved comfortably above its major daily exponential moving averages (EMA). Its 20-day EMA (green) sits near $78,633, while the 50-day EMA (red) is around $74,929. The 100-day (purple) and 200-day (blue) EMAs are near $72,286 and $73,477, respectively.
Still, BTC’s daily relative strength index has risen to around 72, entering technically overbought territory. That increases the possibility of a short-term pullback or consolidation before another advance.
A decisive return below the flag structure, particularly below the 20-day EMA would weaken the bullish continuation setup.
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Of that total, $384.71 million came from short positions, compared with just $47.03 million in long liquidations.
That means shorts accounted for roughly 89% of all liquidations, highlighting how heavily the latest move has punished bearish traders.
The imbalance also shows the scale of the squeeze: short liquidations were more than eight times larger than long liquidations.
As BTC pushed beyond the $82,000-$82,300 resistance area, forced short covering likely added further buying pressure and helped accelerate the move toward $85,000.
The broader macro environment has offered additional support.
Oil prices declined on Monday, easing some inflation concerns and helping Treasury bonds recover, while global equities advanced. Bitcoin also benefited from improved sentiment.
