Bitcoin's megaphone pattern indicates potential breakouts with volatility, reflecting market indecision

From Cointelegraph

March 15, 2025 06:37:32 AM:

The Bitcoin megaphone pattern showcases increasing volatility with higher highs and lower lows, indicating potential breakouts in either direction. The pattern, resembling a megaphone, reflects market indecision and instability. Traders use trendlines to identify this formation, which has appeared at pivotal moments in Bitcoin’s trading history.

In bullish megaphone formations, the price trend starts upwards, retraces slightly, forms a higher high, then drops to a lower low before breaking out upwards. Conversely, bearish megaphone formations start with a downtrend, see a minor upward correction, form a lower low, and ultimately break out downwards.

Megaphone patterns in Bitcoin trading have been observed during key moments, including the early days of extreme volatility, a bearish formation in late 2017-early 2018, and a bullish turn in early 2021. These patterns reflect market indecision and can signal potential breakouts in either direction.

Trading strategies for the megaphone pattern include breakout trading by entering trades upon a decisive breakout with strong volume confirmation, swing trading within the pattern’s boundaries, and a false breakout strategy that capitalizes on brief breaches followed by reversals. Risk management is crucial due to the pattern’s volatility.

To mitigate risks associated with the megaphone pattern, traders should be aware of volatility, manage position sizes and leverage cautiously, set stop-loss and take-profit levels within the pattern boundaries, and use adaptive risk controls to adjust trades based on evolving market conditions. Happy megaphone trading!

Read more at Cointelegraph: Bitcoin’s megaphone pattern, explained: How to trade it