Bitcoin is currently moving within a broadening wedge structure on the daily chart, showing expanding highs and lows that often precede major breakouts.
This setup, also called a megaphone pattern, reflects a phase of growing volatility and market indecision before a strong directional move.
At present, Bitcoin trades near $107,984.98, consolidating after a series of volatile swings that stretched from $104K to $115K in recent days. Notably, these volatile swings have not been restricted to Bitcoin alone but have also affected other cryptocurrencies, including Ethereum (ETH).
According to the market analysts, the next major wave could take Bitcoin toward $127,000, where the upper boundary of this wedge lies.
A successful breakout above this level could set the stage for a longer rally toward $150,000, marking a new cycle high.
Still, the possibility of a brief dip toward the lower boundary near $100,000 remains, in line with historical patterns that show a final retest before the breakout.
Sentiment mixed after the rapid shakeout
Recent market data from Glassnode highlighted how Bitcoin faced a sharp correction last week. This flush-out phase cleared overleveraged positions and reduced speculative pressure, but it also left traders wary.
Although Bitcoin quickly rebounded to $111K, sentiment remains cautious, with investors preferring capital protection over aggressive positioning.
Momentum indicators reflect this defensive stance. The RSI dropped into oversold levels before stabilizing, while Cumulative Volume Delta remains negative, signaling continued sell-side pressure.
Spot market activity has slowed, suggesting reduced conviction among short-term traders.
More short-term holders enter Bitcoin
In the derivatives market, open interest and funding rates have both declined, showing that traders are de-risking. Meanwhile, the 25-Delta Skew spiked as options traders sought downside protection.
On-chain signals also indicate a shifting market composition, with short-term holders’ supply rising, pointing to more speculative capital participation.
Profitability metrics such as Net Unrealized Profit and Loss (NUPL) have turned negative, showing that most wallets now hold unrealized losses.
However, Realized Cap continues to climb, reflecting steady inflows from long-term holders with stronger conviction. Overall, Bitcoin’s structure remains bullish, but confidence is still rebuilding.