Bitcoin Forms Ominous ‘Megaphone’ Pattern

• Bitcoin’s megaphone pattern signals potential for significant price shifts, testing lower boundaries.
• Technical indicators show bearish momentum, with key resistance levels near $70K challenging bulls.
• Market sentiment remains cautious, with predictions of a drop below $50K reflecting trader uncertainty.

Bitcoin (BTC) is currently developing an inverted expanding triangle, also known as a megaphone pattern, according to crypto analyst Peter Brandt. This pattern, characterized by increasing volatility, often precedes major price shifts. Brandt cautions that if Bitcoin tests the lower boundary of this pattern, its price could plummet to approximately $46,000.

However, to reignite a bull market, a powerful surge beyond previous all-time highs is necessary. The pattern suggests that selling pressure currently outweighs buying interest.

Bitcoin Price Struggles Below Key Resistance Levels

As of September 6, 2024, Bitcoin’s weekly price movement against the US Dollar on GDAX (now Coinbase Pro) reflects continued bearish momentum. Bitcoin is trading at approximately $56,295.96, representing a decline of $2,816.81. 

Technical indicators, including moving averages, reinforce the bearish outlook. Moreover, the 8-week moving average (C,8) is positioned above the 18-week moving average (C,18), signaling continued downward pressure. 

Additionally, the Average Directional Index (ADX) at 26.58 indicates a moderate trend strength, while the Average True Range (ATR) of 7206.02 indicates heightened volatility. The current price action suggests Bitcoin is in a consolidation phase, trading within a range of $49,050.01 and $65,000.

Market Sentiment and Future Projections

Adding to the cautious sentiment, Arthur Hayes, founder of BitMEX and CIO of Maelstromfund, expressed bearish expectations, predicting a potential drop below $50,000 over the weekend. Hayes confirmed his short position on Bitcoin , reflecting the prevailing uncertainty among traders.

However, at the time of writing, Bitcoin was trading at $56,437.45. Despite a 1.31% decline over the previous 24 hours, Bitcoin retains its top position on CoinMarketCap, with a market cap of $1.11 trillion. 

Bitcoin’s recent price chart suggests fluctuations within a narrow range, marking a market in consolidation. The current trend, marked by resistance near $57,000 and support around $56,000, indicates a cautious market, with traders awaiting clear signals before committing to further positions.