Hey guys, Technical Analysis is a thing which represents the past and allows predictions for the future. Since Cryptocurrencies are a phenomenon and instituionals have not entered the market yet, it has hard to adapt such indicators and fractals into bitcoin.
Even in classic markets like the stocks market, bonds & derivates, Technical Analysis is something which works, because people believe in it. And since everybody believes it, it works out for everyone!
Nevertheless, we can try it out in crypto as well! :-)
The Cup and Handle formation:
As a stock forming this pattern tests old highs, it is likely to incur selling pressure from investors who previously bought at those levels; selling pressure is likely to make price consolidate with a tendency toward a downtrend trend for a period of four days to four weeks, before advancing higher. A cup and handle is considered a bullish continuation pattern and is used to identify buying opportunities.
It is worth considering the following when detecting cup and handle patterns:
Length - Generally, cups with longer and more "U" shaped bottoms provide a stronger signal. Avoid cups with a sharp "V" bottoms. (IS GIVEN)
Depth - Ideally, the cup should not be overly deep. Avoid handles that are overly deep also, as handles should form in the top half of the cup pattern. (IS GIVEN)
Volume - Volume should decrease as prices decline and remain lower than average in the base of the bowl; it should then increase when the stock begins to make its move higher, back up to test the previous high. (IS GIVEN)
As you can see, this formation works! But careful, it does not mean it works out, because only some lines match with the idea od a Cup and Handle!
I Hope you enjoyed this idea, let me know if you think this is actually good or absolutely garbage, your quality-trader
Trade closed: target reached
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Hey guys, this one turned out to be a hit! Looks like, BTC took a little shake out before it took off!
Trade is closed successfully. Best, Roman
Trade closed: target reached
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Seeing BTC at 40K, I am happy we analysed this cup and handle pattern! So glad I had time back then to observe and share this thoughts with you!
I’m not disagreeing with you on this TA, I actually found it very informative. I was under the impression that both sides of the cup pattern need to be level or at least close before the handle forms. Is that not the case?
GER-Quality-Trades
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@ZapRowsdower, Well, technically if you want to have a textbook example- then you are right. But in Crypto and basically in all the markets, pattern seem to adapt to the social and economical contexts. It would not have been a problem to drive the price up to 20K, the big resitances were broken without any problems...
The idea of this chart is to see similarities and predict what might happen. But I understand your point, which is legitimate!
AlextheBlack
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Cool
GER-Quality-Trades
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Anyone still watching this chart? Worked out sooo well :-)