According to U.Today, Bitcoin is gradually gaining stability, with its price hovering around the $56,000 mark. However, the market lacks sufficient buying power and needs another boost. The 'bullish megaphone' pattern might be the solution to this issue. This pattern, often indicative of a potential significant surge in technical analysis, consists of two diverging trend lines, one sloping downward and the other upward, giving the chart a megaphone-like appearance.
The price movements are expanding between these two trend lines, exhibiting an increasing degree of volatility characteristic of this pattern. This pattern typically develops after a phase of sideways or consolidation trading, indicating that the asset is preparing for a breakout. The formation of this pattern begins as prices fluctuate between higher highs and lower lows, with each price swing being larger than the previous one, thus creating a megaphone shape.
As the pattern develops, the volatility increases. The market often becomes confused and uncertain as price movements increase in magnitude. A key feature of the bullish megaphone pattern is its increased volatility. The defining characteristic of this pattern is its ultimate breakout, which usually occurs through the upper trend line for a bullish megaphone. This breakout, supported by higher buying interest and trading volume, signifies strong upward momentum.
Following the breakout, the target price is typically determined by measuring the pattern's height at its widest point. The potential upside is then calculated by adding this measurement to the breakout point.