Bitcoin Price Shows Bullish Cup and Handle Pattern
The Bitcoin (BTC) price chart has revealed a classical ‘Cup and Handle’ pattern, according to Matt Dines, the Chief Investment Officer at Build Asset Management. This pattern is considered a strong bullish signal by market analysts and traders. The ‘Cup’ part of the pattern formed during the Bitcoin bear market, with the lowest point at around $17,600 acting as a support level.
Reversal of Downtrend Indicated
The left side of the cup shows a rounded bottom resembling a “cup,” indicating a decline followed by consolidation and then a rise. Bitcoin’s price has steadily recovered since hitting the bottom, mimicking the right side of the cup and suggesting a reversal of the previous downtrend.
The Formation of the Handle
After the recovery, a moderate retracement forms the ‘Handle’ of the pattern. This consolidation phase is represented by a slight downward trajectory before a breakout. The Bitcoin price drop to $38,600 marked the bottom of this pullback, and with the breakout above $48,000, BTC validated the cup and handle pattern.
Setting a Price Target
To determine a price target, traders often use the height of the cup as a reference. In this case, it is approximately $31,973 from the low to the resistance line at $48,000. By projecting this height from the handle’s formation, an estimated target around $75,000 can be derived.
Market Behavior Influences Price Movement
Dines emphasizes that market participants’ collective behavior will guide the price movement. If enough participants set their price target at around $75k and put on similar trades, it can turn into reality. At the time of writing, BTC is trading at $51,821.
Hot Take: Bitcoin’s Cup and Handle Pattern Points to a Potential Rally to $75,000
The Bitcoin price chart has formed a classic ‘Cup and Handle’ pattern, which is seen as a bullish signal. The cup formation indicates a reversal of the previous downtrend, while the subsequent handle formation suggests a consolidation phase before a breakout. Traders often use the height of the cup to set a price target, projecting it from the handle’s formation. In this case, the target is estimated to be around $75,000 based on the chart analysis. Market participants’ collective behavior will play a significant role in determining whether this target becomes a reality. Currently, BTC is trading at $51,821.
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