Bullish flag pattern signals a potential breakout
On the daily chart, BTC is forming a bullish flag — a classic technical pattern that often precedes a strong rally. This formation began on June 22, when Bitcoin bottomed at $98,320 before climbing to its previous record high of $123,200, creating a pole nearly $25,000 tall.
Over recent weeks, the coin has been consolidating in a downward-sloping channel — the “flag” — and is now showing signs of breaking above the upper boundary. According to technical rules, the target price in a bullish flag is calculated by adding the pole’s height to the breakout point. With a breakout around $117,000, this points to a potential target of roughly $142,000.
BTC also remains above its 100-day Exponential Moving Average (EMA) and has formed a “break & retest” pattern after pulling back to $112,000 — its previous ATH and now a key support level.
Technical indicators are also aligned with further gains: the Relative Strength Index (RSI) has crossed above the neutral 50 mark, while both the MACD and Money Flow Index (MFI) are trending upward.
ETF inflows surge as Fed rate cut hopes grow
Several fundamental factors are also driving optimism. Data shows that U.S. investors continue to accumulate Bitcoin, with ETF inflows surging by over $246 million last week — a dramatic turnaround from the $643 million in net outflows the week before.
Meanwhile, Bitcoin supply on exchanges has dropped to its lowest level in years, signaling weaker selling pressure amid rising demand — including purchases from publicly traded companies.
On the macroeconomic front, expectations are mounting that the Federal Reserve could begin cutting interest rates as early as its September meeting, following weaker-than-expected nonfarm payrolls data released earlier this month.
If Tuesday’s U.S. CPI report for July comes in below forecasts, the probability of a rate cut will strengthen further. Economists expect headline CPI to rise to 2.8% as the impact of new tariffs begins to show.
