Bitcoin’s price has been making headlines lately, and one analyst believes it’s showing a specific pattern that could signal big things to come.
The Megaphone Pattern: What Does It Mean?
According to crypto trader Merlijn The Trader, Bitcoin is currently following a “megaphone pattern” (also known as a broadening wedge). This pattern shows prices making higher highs and lower lows, creating a widening shape on a chart. This often means increased volatility and uncertainty in the market, usually leading to a significant price jump or drop.
Historically, Bitcoin has broken out upwards from similar patterns. The chart shows past instances where Bitcoin broke out, retested the breakout level, and then went on a significant price surge.
More Than Just Charts: The MVRV Z-Score
The analyst also points to the MVRV Z-Score. This metric compares Bitcoin’s market value to its realized value, helping determine if it’s overvalued or undervalued. A high score suggests overvaluation, while a low score suggests undervaluation. Currently, Bitcoin’s MVRV Z-Score is relatively low, suggesting there’s still potential for upward movement before a major correction.
Challenges and Concerns
Despite positive news, like President Trump’s pro-crypto stance, Bitcoin’s price hasn’t reflected this optimism. Some experts blame this on trade tensions and the possibility of a recession. Others, like Coinbase analysts, point to a lack of positive market catalysts. Another analyst, Ali Martinez, even predicts a further drop to $75,000 before a price rebound.
The Bottom Line: $72,000 is Key
The megaphone pattern suggests potential upside for Bitcoin, but there’s a catch: Bitcoin needs to stay above $72,000 for this pattern to play out as predicted. While the future is uncertain, the combination of chart patterns and market indicators provides a fascinating perspective on Bitcoin’s potential trajectory.
