The Bitcoin buzz is back. Now we’re hearing headlines yelling about $140,000 targets, all due to a bull flag pattern. Hold on a second. OK, don’t go mortgaging your house to buy Bitcoin just yet—let’s get some balance into this story. I’m Eleanor Brooks, and I’ve spent the last four years unpacking the blockchain. Believe me, technical analysis by itself almost never tells the entire story.

Flags Are Just One Indicator

I know, the bull flag is a stereotypical chart pattern. It’s a sign that a recent trend of positive increases might continue in the right direction. We identify the vertical “pole” of the price increase, followed by the sideways consolidation creating the “flag.” The speculation? This price consolidation is merely a pause before the next move higher, perhaps up to $146,000. This target, if Bitcoin were to break above $109,000 on a daily close basis, is what CoinDesk analyst Omkar Godbole refers to. Fair enough.

Here's where the discomfort begins. Using chart patterns alone is like trying to chart a hurricane with just a street atlas.

Think about it. In the larger context, Bitcoin is a very new asset. We’re discussing a much more rash and unpredictable creature than markets. It can be dangerous to treat these technical patterns as gospel. Today, the market is very sensitive to an Elon Musk tweet or a whisper from a regulator.

History Doesn’t Always Repeat Itself

We’re constantly told that bull flags have the lowest failure rate. Historically, they tend to be reliable. But as we all know, history is written by the victors, and crypto history is very much still being written. For example, what they paved in 2017, or even 2021 may not be worth a hill of beans in today’s challenging economic climate.

Consider the dot-com boom. Just like back then, thousands of “no brainer” algorithms are driving investors over the edge. People got so carried away that they didn’t really think through first principles. The same thing can happen with Bitcoin. Just because a pattern is successful 99.9% of the time doesn’t make it the right fit.

What about those “failures”? The article called their chart setup, referring to a recent breakdown below the flag and a failed bullish breakout. These aren't just minor inconveniences. They represent real losses for real people.

What if $140K Actually Happens?

Suppose for a moment, and I am saying this against my better judgment, that Bitcoin does, in fact, reach $140,000. Is that necessarily a good thing? I'm not so sure.

Like the proverbial black swan, a parabolic rise in Bitcoin’s price would likely set off a cascade of unforeseen ramifications. Think about increased regulatory scrutiny. Governments around the world are already flying blind when it comes to crypto. A huge price increase will only exacerbate that pressure, increasing the chances of a future politically motivated knee-jerk reaction resulting in draconian regulations that kill innovation.

Then there's the environmental angle. Bitcoin’s energy intensity has become a major, controversial topic. Second, a price surge will further accelerate non-market mining activity. This will continue to exacerbate the situation and provide more evidence to the narrative that Bitcoin is bad for the planet.

The risk of a speculative bubble. The further Bitcoin climbs, the further it has to fall. While a correction is inevitable, it will produce a tsunami of financial tragedy for those inexperienced investors that get wiped out.

The Responsible Path Forward

I'm not saying Bitcoin is doomed. All I’m saying is that we should be taking these giant price estimates with a grain—or bag—of salt. Don't get swept up in the hype. Do your own research. Understand the risks involved.

Before you even think about buying Bitcoin, ask yourself these questions:

  • What percentage of my portfolio is this?
  • Am I prepared to lose all of it?
  • Do I understand the technology behind it?

Look, I understand the appeal of get rich quick schemes très honestly. However, as we really shouldn’t have to tell you, investing is a marathon, not a sprint. So don’t let yourself be dazzled by the promised land of a $140,000 Bitcoin. Be sensitive to the many unpleasant truths of risk, volatility, and unintended consequence. As the wise Bitcoiners say, a fool and his Bitcoin are soon parted.