Bitcoin: Tea Cup and Handle

May 24, 2019 / by Bill Noble

Continuing on our relentless theme of applying old school chart techniques to crypto, we are seeing a classic chart formation develop in Bitcoin (BTC).

Looking at XBTUSD on BitMEX, we are seeing a “tea cup and handle” continuation formation on an intraday chart (Figure 1).

 class= Figure 1

The theory behind the pattern is simple. A rounded, and perhaps wild, consolidation is followed by a choppy range.  

Then, once the instrument breaks out of the choppy range, the market would move the depth of the cup from the top of the handle. Said plainly, if Bitcoin (BTC) breaks out above $8,200, there could be a $2,000 up move that could take Bitcoin (BTC) to $10,000.

Looking closer at the chart, $7,840 would be an important support for XBT to hold.

Adding to the potentially bullish picture is Ethereum (ETH). It seems like Ethereum (ETH) has completed an A-B-C correction (Figure 2). If Ethereum (ETH) can hold together, another big move to the upside may be in the cards.

 class= Figure 2

Bottom Line: We get a sense that people — institutions in particular — who are procrastinating about buying Bitcoin (BTC) may watch a big rally from the beach on the U.S. Memorial Day weekend.

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