Bitcoin Forms Massive Cup and Handle

Bitcoin is developing a nine months long cup and handle formation on weekly candles for the first time since 2019.

The cup is one of the longest we have seen in crypto, and as you’d expect it looks like a two year old drew it, but the structure is largely there.

We form the left side, starting with a sharp drop in June, and then there’s a lower bottom in November to give it a curvy U shape.

The right side has a sharp jump in March, with it anyone’s guess whether the last few weeks have actually created a handle.

A cup and handle is one of the most bullish formation in technical analysis because it indicates that bears are out of ammo.

They were strong in June and brought the price significantly down, but afterwards we have more sideways than price falls, culminating with the two months long sideway between November and January.

As bears were no longer pushing down the price anymore, bulls successfully gave it a try and to double from $15,000 to $30,000.

Bears then give it a last try and form the handle. If it turns out to actually be a handle, that becomes a final confirmation that bears have nothing left.

At which point bulls charge in a clear road. In this case to maybe $50,000, but naturally that depends on whether it actually plays out.

More widely, May tends to be a great month in crypto. We have the Consensus conference, a 2016 title related to the then blocksize wars that is a bit out of date now.

It is still bear, so we expect it to be boring, but nowadays these conferences are huge affairs, a bit like the World Cup final or the Super Bowl for crypto.

In the midst of bull we had Jack Dorsey getting heckled, F Elon Max Keiser, the dogecoin guy, and a bit more in what we called the best bitcoin conference yet.

That was the Bitcoin Magazine conference, not Coindesk’s Consensus. As new entrants in the conference business, the novelty maybe gave it an edge.

Consensus on the other hand tends to be a more corporate affair, with many of these, erm, bureaucrats. They’re just about to finish actually, holding it in April this year.

The Bitcoin Miami conference is next month and this has Patrick McHenry, the chair of the House Committee on Financial Services.

They also have Tulsi Gabbard, and some Governor of Java in Indonesia, in uniform too.

Just why these conferences affect the price is anyone’s guess, or indeed if they affect it at all, but more widely still in addition to traditional finance being a bit wobbly right now, it is also arguably the case that cryptos have just fallen too much.

That’s in price. In many other measures, they’re up a lot. A clear illustration of that is all these Congressmen talking about crypto, a testament to its success and an indication the industry stands at a resistance line before hopefully breaking through to get rid of the dinosaurs and make things shiny again.

“We shouldn’t invent new accommodating regulatory structures,” said Maxine Waters.

“We shouldn’t invent,” and if by we she means 84 year olds like her, then they shouldn’t be doing much else either but enjoying the retirement sun instead of hoarding those seats of power.

But that they tend to be basically dinosaurs is obviously to our advantage because all we have to do to win is keep doing what we’re doing and wait.

The new generation has very different ideas, while the old one won’t change theirs because what do they care. As it happens, there’s a lot more of the former than the latter, so change is being forced through.

That’s the bet, and if the bears are tired of betting now, then maybe we’ll get a run although bulls remember previous episodes as runs at this point don’t tend to hold.

But what does hold mean? Down to $40,000 from $50,000, or $35,000 being the bottom, and reasonably arguably $30,000 being the worst? Making current price less downside and potentially a doubling for traders.

For holders, just keep holding. While for users there’s the question of whether it is only at this stage when we first start seeing the effects of the raw adoption during the brutal bear.

And whichever way, that we’re talking of up is a pretty good indicator in itself as it has been a fairly long time in crypto terms since we even considered it likley.

The train is slow. For the OGs they hope it keeps being slow until they get their gox coins in September or October, but for all this might be a slowly moving up train with little looking back, and if the cup and handle plays out then temporarily maybe a fast one to settle at potentially a new level during summer, for then autumn to give more clarity.

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• Source: https://www.trustnodes.com/2023/04/28/bitcoin-forms-massive-cup-and-handle