Recent analytical forecasts suggest that Bitcoin price may reach new records due to the emergence of a bullish megaphone pattern. This pattern, alongside the behavior of short-term holders, represents critical indicators for the market.
Bullish Megaphone Pattern
The bullish megaphone pattern, also known as a broadening wedge, occurs when the price creates a series of higher highs and lower lows. A breakout above the upper boundary of the pattern can lead to a parabolic rise. Bitcoin's daily chart displays two such patterns. The first, smaller one, has formed since July 11. The recent rebound from the lower trendline at $108,000 indicates that the formation is indeed developing. The pattern will be confirmed once it breaks above the level of $124,900.
Panic Among Short-Term Bitcoin Holders
The recent price fluctuations of Bitcoin, having decreased by 12% from its $24,500 all-time high, have pushed short-term holders, those holding the asset for less than 155 days, into panic. Many have sold their assets at a loss, negatively impacting their market value. The short-term holder Market Value Realized Value (MVRV) ratio has fallen to the lower boundary of its Bollinger Bands, signaling oversold conditions.
Price Growth Prospects
Recent observations suggest that the oversold conditions among short-term Bitcoin holders indicate that the asset's price may be poised for an upward movement. A break above the $125,000 level could lead to a price increase towards $206,800, with prospects even reaching $260,000, suggesting the potential for new historical highs.
In the current cycle, multiple bullish patterns are forming in the Bitcoin market, which may lead to significant price growth. The behavior of short-term investors also suggests possible price corrections and recovery after recent declines.
