Bitcoin is facing another layer of pressure. Alongside a hawkish Federal Reserve, higher bond yields, and concerns tied to Strategy (MSTR), a chart formation is now adding to the caution around BTC: a bear flag on the daily timeframe.
The setup was highlighted by pseudonymous trader Doctor Profit, who the report says previously called Bitcoin’s bull-market peak at $126,000 and the selloff that followed. In his latest view, BTC could fall to the $54,000-$56,000 zone first, then trade sideways for a period before another leg lower. He said the bottom could be near the $40,000-$50,000 region.
The chart setup centers on Bitcoin’s move from $82,000 to below $60,000
In a post on X, Doctor Profit said Bitcoin is forming a “massive bearish flag” on the daily chart. His chart treats the decline from the May high of $82,000 to below $60,000 by June 5 as the flagpole, while the rebound to $68,000 forms the flag itself. If price breaks below the lower boundary of that structure, the selloff could deepen.
A bear flag usually appears after a sharp drop. Price then rebounds in a temporary relief move, creating the flag portion of the pattern; if that rebound breaks down, traders often project a move lower that roughly matches the size of the first decline. On a chart, it resembles an upside-down flag. The visual is simple. The outcome is not guaranteed.
Options flows show traders positioning for more downside
The report also notes that chart patterns are not exact science. Two analysts can study the same chart and outline the flag differently. Bear flags can break down, but they can also fail, with price turning higher instead of extending lower.
Even so, recent flows in the options market have pointed in the same direction. According to the report, traders bought put options last week, signaling expectations for a near-term decline toward $52,000. With Bitcoin quoted in the article at $64,168.87, that positioning suggests the market is still watching downside risk closely.