Cup & Handle pattern:
Now if we switch to the monthly chart to see what's happening on the bigger time period. The price action of DGB has completed the formation of a pattern and the resistance of the cup is at 0.00000318 btc . After completion of the cup now the price action is moving within the handle. If we place the simple moving averages with the time period of 50 and 25 then we can also observe that the priceline is now moving between the two simple moving averages. At the moment the priceline of DGB has hit the resistance of 50 and moving down to the support of 25 . I have also placed the Fibonacci tool from the support of this cup up to the resistance. After placing this tool it is very clear that the price action of the DGB has retraced between 0.383 to 0.50 level. At 0.50 level we also have the 25 support on the monthly chart. That is very strong support and it will be very difficult for the priceline of Digibyte to break down this . Therefore I am not expecting that the price action will move more down than the 25 . But if the 25 will be broken down then we can expect that the formation will be invalidated and we can witness a huge drop because if we switch on the weekly chart then price action is also completing the formation of a .
On the weekly chart it can be clearly seen that the price action has retraced between 0.382 to 0.618 level after the completion of initial X to A leg. Then priceline has projected between 1.13 to 1.618 of A to B leg and here we have received 2nd confirmation for the . Now as per Fibonacci sequence of this pattern the priceline of Digibyte can retrace between 0.886 to 1.13 Fibonacci level for the completion of the final leg. But the completion of the final leg depends on the breakdown of 25 on the monthly chart that is very difficult.
Now at one side on the bigger time period monthly chart have a complete formation and on the other side on the smaller time period weekly chart we are expecting the completion of the final leg of the pattern. In my opinion the bigger time period pattern is more stronger and unless the 25 would be not broken down we can expect a move up to the resistance of the cup. But if the 25 on the monthly chart will be broken down then we can witness a very massive sell off until the price action will not complete the final leg of the . And from the potential reversal zone the of the pattern we will see a powerful rally. Therefore in any case we should use the 25 of monthly chart as stop loss.