Domain registered with Godaddy hosting with bluehost

my domain is registered on godaddy but the hosting is on blue host, if i update the name servers on Godaddy would everything still function normally? or what exactly should i do to set up Cloudflare

You first need to add the domain to Cloudflare, upon which they will attempt to import the most common DNS records. You should check if everything you need was properly imported, after which you should be able to switch the nameservers without issues.

thank you for your assitance but once that is done do i change the nameservers with godaddy or blue host

With Godaddy.

but then it wouldn’t point from godaddy to blue host (the host of the website)

Thats the whole point.

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