Bitcoin has undergone a significant technical formation known as the “Cup and Handle” pattern, as identified by Matt Dines, the Chief Investment Officer at Build Asset Management. This pattern, which resembles a cup and handle, is considered a strong bullish signal and is closely followed by market analysts and traders. The formation of this pattern began in March 2022 when Bitcoin’s price plunged below $48,000, entering a bear market that lasted for an extended period.
The bottom of the cup-shaped pattern was reached at approximately $17,600, indicating a strong support level for Bitcoin. The left side of the pattern shows a rounded bottom, or a “cup,” which occurs when the price initially declines, then consolidates, and finally starts to rise again. Since reaching this bottom, Bitcoin’s price has steadily recovered, resembling the right side of the cup and indicating a bullish reversal of the previous downtrend.
According to Dines, the saucer or cup represents a consolidation period and a temporary pause in the downward trend before the price begins to rise toward resistance levels. In early January this year, Bitcoin’s price completed the cup portion of the pattern by recovering to the initial resistance line. This recovery marked an important milestone in the formation of the Cup and Handle pattern.
Following the recovery, the subsequent phase of the pattern is represented by a moderate pullback, forming a small dip or handle. This handle is characterized by a slight downward trajectory and is considered the final consolidation before a breakout. Bitcoin’s price dropped to $38,600 at the end of January, signaling the bottom of the pullback.
The breakout occurred when Bitcoin’s price surpassed $48,000, validating the Cup and Handle pattern. This breakout confirmed the pattern’s formation and indicated the potential for further upward movement in Bitcoin’s price.
Dines explained that the vertical target line, projected from the bottom of the handle, serves as a basis for traders to set their price target. The height of the cup, measured from the low at around $17,600 to the resistance line at $48,000, determines the potential price target.
Based on the chart analysis, the height of the cup translates to approximately $31,973, representing the increase in Bitcoin’s price from its lowest point to the current level. Projecting this height from the handle’s formation suggests a price target in the vicinity of $75,000.
Dines also emphasized that the collective behavior of market participants will significantly influence the price movement. If enough participants set their price target around $75,000 and actively engage in trading activities at that level, it could shape the dominant price action and turn the chart’s projection into a reality.
Bitcoin’s Cup and Handle pattern, as identified by Matt Dines, indicates the potential for a rally to $75,000. The formation of the cup and handle, along with the breakout above $48,000, provide technical evidence for a bullish reversal in Bitcoin’s price. However, it’s important to note that investing in cryptocurrencies carries risks, and individuals should conduct their own research and exercise caution before making any investment decisions.
Please note: The information provided in this article is for educational purposes only and does not represent the opinions of NewsBTC. Investing in cryptocurrencies carries risks, and individuals are advised to conduct their own research and make informed investment decisions. Use the information provided on this website entirely at your own risk.
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