The consolidation into the flag formation has helped Bitcoin to cool off its relative strength index (RSI) which was approaching the 70% level on Friday. When a crypto or stock’s RSI reaches over the 70% level it is a sell signal for technical traders. When Bitcoin reached an RSI of over 70% on July 30, Aug. 7, Aug. 9 and Aug. 13 sellers came in and dropped the crypto into consolidation.

The low trading volume on Bitcoin also signals the slightly lower prices are a consolidation. Bears should look for high volume on a move lower to feel confident the rally is over.

Bitcoin is trading above the eight-day and 21-day exponential moving averages (EMAs) with the eight-day EMA trending above the 21-day, both which are bullish indicators. The crypto is also trading above the 200-day simple moving average which indicates overall sentiment is bullish.