Is bitcoin currently realising cup and handle characteristic?
Taking a short look on cryptocurrency exchanges, especially on a BTC/USD trading pair made me wonder if bitcoin (and some other cryptocurrencies) currently realise cup and handle pattern in mid-term. Here is how it looks currently:
Before March BTC started to increase it's value (first red arrow) and there was a weak bullish trend visible. After a while it turned back to form a U shaped formation that ended up with a small fall. This matches a description of cup and handle charts formation. Such formation ends up with a bull run above the cup ("U") edge:
If this is true we would be currently in the handle part. This would mean crypto market will raise a little more this month.
What confirms such forecast:
- RSI reduced rapidly in last days and it currently allows some price raise.
- "V" shapes are always a misleading traps but in this case we have clearly rounded bottom instead of a peak.
- Market shows some signs of recovery after a crash at the end of last year.
What are the dangers that this formation will collapse:
- Trading volume is low.
- Cup and handle is mainly a continuation pattern. That means that after the handle the price continues to grow like before the cup. Growth before the cup was rather small.
- No strong fundamental signals came to support the rise yet. No bigger good news, no governments positive opinions etc. This is strictly technical analysis.
Let me know what do you think about such prediction and keep your interest in crypto world! :)