Megaphone pattern signifies increased in volatility and possible reversal in direction, It also means that traders can not agree on the price direction!
It is difficult to predict the outcome of this pattern because it is neither bearish or bullish, it is neutral. We can expect volatile breakout and a lot of liquidation of longs and shorts though!
I was looking at the chart to find the previous megaphone pattern on the hourly chart but I couldn't find recent one we could say that the one that formed on Monday was a megaphone pattern it it kind of followed the top line until it eventually broke down and we had sell off.
The pattern was also formed after the upside was broken and bitcoin attempted a recovery!
If it breaks to the downside that would make the "M" pattern very prominent it can also serve as a traders trap. If it breaks down a lot of people might put short position only to get liquidated with a pump.
Be careful trading this, I think crazy price action is imminent!
All The Best,
Aventurine!
