Bitcoin to skyrocket? Historic BTC cup and handle pattern spotted
Bitcoin to skyrocket? Historic BTC cup and handle pattern spotted 
Cryptocurrency Sep 3, 2024 Share
Over the last six months, Bitcoin (BTC) has been trading in a range that is getting progressively tighter. During this period, prices have ranged from a high of $73,100 to a brief low of $53,960 — as of press time, the world’s largest cryptocurrency has shed 11.78% of its price, taking a notable bite out of the 40.10% year to date (YTD) rise.
In a TradingView post on August 27, technical analysis expert and trader MetaShackle suggested that “BTC is forming an absolutely massive Cup & Handle on the Daily/Weekly chart. There has never been a formation like this in the history of crypto, and it’s sure to be an incredible run to levels that will shock the world.”
BTC 3-year cup & handle pattern. Source: TradingView / MetaShackle
What is a cup and handle pattern?
A ‘cup and handle’ is a long-term, bullish chart pattern that traders use to find opportunities when an asset’s price will break out to the upside. Like with all chart patterns, the name is a node to its shape — with the pattern consisting of a ‘cup’ with a rounded bottom, followed by a smaller reversal to the downside which acts as the ‘handle’.
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There are a couple of ways to determine how legitimate the pattern is. In general, the more even the cup, the better — and the handle should not retract to more than one-third of the cup’s depth. Should the handle retract to half the cup’s depth, the chart pattern is considered false.
In terms of entry points, traders use a simple rule of thumb — price targets are set by taking the depth of the cup and adding it to the point where the handle breaks its resistance level.
Is a Bitcoin breakout coming?
Although it is too early to tell, MetaShackle’s findings cannot be discounted. The cup and handle pattern is most often used with a weekly trading chart, as MetaShackle has done — and the pattern has been playing out over a long period, with the cup beginning on November 1, 2021, and the handle starting on April 1, 2024.
Should the analyst’s predictions come true, the chart pattern would indeed be a record breaker — accounting for 761% in gains from start to finish. The trader’s price target is set at $130,870 per token, which would represent a 121.32% increase over the asset’s price of $57,850 at the time of publication.
Other researchers, such as Rekt Capital, have highlighted September as a critical time — as this would line up with BTC’s historical tendency to break from consolidation 150 to 160 days after a halving event.
However, investors should still exercise caution — even Rekt Capital has highlighted that September generally being a weak month for Bitcoin could lead to a delay and an eventual October breakout.
#BTC
History suggests that Bitcoin tends to breakout 150-160 days after the Halving
That would mean Bitcoin would breakout from its ReAccumulation Range in late September 2024
That being said, Average Historical Monthly Returns for September are -4.48%, with highest ever… pic.twitter.com/EnEsc8M8O8
— Rekt Capital (@rektcapital) August 31, 2024
Bearish BTC signals
With assets as volatile as BTC, it is crucial to examine countertheses before committing to a course of action. Not everyone shares MetaShackle’s optimistic appraisal of the situation.
Crypto trader Alan Santana made a very bearish case in a TradingView post on September 2, in which he outlined a scenario in which Bitcoin could drop to $43,000 followed by another decrease to $38,000.
Per Santana, the fact that Bitcoin’s moving average (MA) dropped below the 8 / 13 / 21-day exponential moving range (EMA) is a signal so significant that it merits extreme caution. If his predictions do pan out, the handle part of the pattern will retrace to more than 50% of the cup’s depth — invalidating the pattern and possibly changing trading sentiment enough to lead to a sell-off.
Upcoming external catalysts for Bitcoin
On the other hand, not everyone is in agreement — financial analysis company TradingShot laid out a bullish case for BTC breaking past $100,000. Per their TradingView post, two significant upcoming events — US presidential elections and the start of an interest rate cut cycle could provide enough of a catalyst to propel the digital asset to new all-time highs.
While investors should certainly remain cautious, there is little doubt that external factors will play a large role in Bitcoin’s medium to long term price action. A Republican victory would almost certainly bolster bullish sentiment as former president Donald Trump has expressed support for creating a crypto reserve — however, while VP Harris’ stance on cryptocurrencies is as of yet unclear, an upcoming fundraiser hosted by the Blockchain Foundation might serve to foster a positive attitude.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
