Bitcoin (BITCOMP), Ethereum (ETH-X), and Dogecoin (DOGE-X) have all settled into bearish flag patterns on their daily charts. The bear flag pattern is created with a steep drop lower forming the pole, which is then followed by a consolidation pattern that brings the stock or crypto higher between a channel with parallel lines or a tightening triangle.

For bullish traders, the "trend is your friend" (until it's not) and the stock or crypto may continue to rise upwards within the following channel for a short period of time. Aggressive traders may decide to purchase the stock or crypto at the lower trendline and exit the trade at the higher trendline.

Bearish traders may want to watch for a break-down from the lower descending trendline of the flag formation, on high volume, for an entry. When a stock or crypto breaks down from a bear flag pattern, the measured move lower is equal to the length of the pole and should be added to the highest price within the flag.

A bear flag is negated when a stock or crypto regains the eight-day exponential moving average (EMA) as support, or if the flag rises more than 50% up the length of the pole.

The Bitcoin Chart

Bitcoin has recently been trading in a short-term uptrend and has been making a consistent series of higher highs and higher lows since Jan. 24, when the crypto bounced up from the $32,933.33 level.

• The uptrend, paired with the 21% drop between Jan. 20 and Jan. 22, has settled the crypto into a possible bear flag pattern.
• On Saturday, Bitcoin was rejecting the eight-day EMA, which is holding the crypto back from negating the bear flag pattern.
• Bitcoin has resistance above at $38.105 and $39,600 and support below at $35,593.22 and $32,200.

The Ethereum Chart

Like Bitcoin, Ethereum has been trading in an uptrend since Jan. 24 by making a series of higher highs and higher lows.

• The uptrend, paired with the 34% drop between Jan. 20 and Jan. 24, has settled Ethereum into a possible bear flag pattern.
• On Saturday, Ethereum was attempting to negate the flag by regaining support at the eight-day EMA.
• Ethereum has resistance above at $2,609.02 and $2,890 and support below at $2,461.63 and $2,317.64.

The Dogecoin Chart

Dogecoin’s chart is similar to both Bitcoin and Ethereum in that it has been trading in an uptrend since Jan. 22. Paired with the 35% drop between Jan. 16 and Jan. 22, it has settled into a bear flag pattern.

• The crypto will need to regain the eight-day EMA to negate the pattern, but lower-than-average volume is holding it back from doing so.
• If Dogecoin falls below the lower ascending trendline of the flag formation on higher-than-average volume, the bear flag will be confirmed.
• Dogecoin has resistance above at $0.144 and 16 cents and support below at 12 cents and the 10-cent psychological level.