Is Bitcoin Forming a Cup & Handle Pattern?
TLDR:
• A Cup and Handle Pattern is a bullish continuation pattern. In that regard we cannot consider Bitcoin’s chart as a Cup & Handle because there is no prior uptrend.
• However, Bitcoins chart pattern does resemble a Cup & Handle and fits with some of the criteria for this pattern.
• Taking this into account, it is possible IMO that Bitcoin, in the next weeks and months, will achieve the target for a Cup and Handle pattern if it manages to break above the 31.5K level resistance.
What is a Cup & Handle Pattern?
A Cup & Handle pattern is a bullish continuation pattern. This pattern was discovered by William O’Neil and published in his book “How to Make Money in Stocks”, 1988.
The components of the Cup & Handle pattern are:
1. Trend:
A valid “Cup” must be a consolidation phase after an uptrend. For example, Gold:
In Bitcoin we do not have the prerequisite uptrend. Therefore, we cannot consider it a continuation pattern.
2. Cup:
The Cup is a U-shaped rounding bottom. The cup’s retracement must be between 33% - 50% of the previous uptrend. Although Bitcoin did form a rounding bottom this is where the similarity ends.
3. Handle:
The handle is a pullback after the right side of the cup is formed. The Handle can take the shape of a flag, a pennant, or a trading range. The shorter the handle the more bullish it is. In this respect Bitcoin’s consolidation does look like a Bull Flag.
4. Duration:
Generally, a Cup can take between 1-6 months to form but, it can take longer and remain valid. In this respect, Bitcoin’s cup is valid.
5. Volume:
The breakout should be with an increase in volume. Here, the breakout hasn’t happened yet. We should keep in mind that for the breakout to be reliable it should be with increased volume. 6. Target:
Pull a “Price Range” from the top of the right side of the cup to the bottom, or vice versa.
Works Cited
Stock Charts (n.d). Cup with Handle. Retrieved from Stock Charts: school.stockcharts.com/doku.php?id=chart_analysis:chart_patterns:cup_with_handle_continuation
• A Cup and Handle Pattern is a bullish continuation pattern. In that regard we cannot consider Bitcoin’s chart as a Cup & Handle because there is no prior uptrend.
• However, Bitcoins chart pattern does resemble a Cup & Handle and fits with some of the criteria for this pattern.
• Taking this into account, it is possible IMO that Bitcoin, in the next weeks and months, will achieve the target for a Cup and Handle pattern if it manages to break above the 31.5K level resistance.
What is a Cup & Handle Pattern?
A Cup & Handle pattern is a bullish continuation pattern. This pattern was discovered by William O’Neil and published in his book “How to Make Money in Stocks”, 1988.
The components of the Cup & Handle pattern are:
1. Trend:
A valid “Cup” must be a consolidation phase after an uptrend. For example, Gold:
In Bitcoin we do not have the prerequisite uptrend. Therefore, we cannot consider it a continuation pattern.
2. Cup:
The Cup is a U-shaped rounding bottom. The cup’s retracement must be between 33% - 50% of the previous uptrend. Although Bitcoin did form a rounding bottom this is where the similarity ends.
3. Handle:
The handle is a pullback after the right side of the cup is formed. The Handle can take the shape of a flag, a pennant, or a trading range. The shorter the handle the more bullish it is. In this respect Bitcoin’s consolidation does look like a Bull Flag.
4. Duration:
Generally, a Cup can take between 1-6 months to form but, it can take longer and remain valid. In this respect, Bitcoin’s cup is valid.
5. Volume:
The breakout should be with an increase in volume. Here, the breakout hasn’t happened yet. We should keep in mind that for the breakout to be reliable it should be with increased volume. 6. Target:
Pull a “Price Range” from the top of the right side of the cup to the bottom, or vice versa.
Works Cited
Stock Charts (n.d). Cup with Handle. Retrieved from Stock Charts: school.stockcharts.com/doku.php?id=chart_analysis:chart_patterns:cup_with_handle_continuation
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