According to a analysis The Bitcoin price chart, shared by renowned crypto analyst Gert van Lagen, illustrates a significant technical pattern on the 3-day chart (BTC/USD) that could potentially signal a rise as high as $300,000. This pattern is known as the ‘cup with handle’ and is celebrated among traders for its predictive reliability and bullish implications.
Unpacking the massive Bitcoin head and handle pattern
The Cup with Handle is a bullish continuation pattern that resembles a teacup on a chart. This pattern is formed when the price initially falls and then rises to form a rounded bottom – the ‘cup’ – followed by a smaller downward move – the ‘handle’ – before resuming its upward trajectory.
The Cup: This segment of the pattern represents a period of consolidation and recovery. It usually starts at a high price level, gradually descends to a rounded, U-shaped trough and rises back to the initial high. In the case of Bitcoin, the cup formation started in November 2021, when the price reached its cycle high at $69,000, and ended in March 2024 after regaining the old all-time high, signaling the end of a prolonged consolidation phase.
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The handle: After the cup, a slight downward movement of the handle is formed, which is smaller in depth and duration compared to the cup. It typically represents a final consolidation or shakeout of less optimistic investors before a significant breakout occurs. Bitcoin’s price has been shaping up in recent months, showing a tighter price range and lower volatility.
Upon completion of the handle, prevailing bullish sentiment and buying pressure often drive the price above the previous resistance level formed by the edge of the cup. This breakout is critical as it confirms the pattern and paves the way for future price gains.
The target price after a breakout of a cup with handle can be projected by measuring the depth of the cup and extrapolating this distance upward from the breakout point. For Bitcoin, the low of the cup at around $15,500 from the initial high at $69,000 provides a vertical benchmark.
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Gert van Lagen says via X: “BTC [3D] – Cup with handle targeting $300,000. Price has broken out of the handle/bull flag and has been successfully retesting it for about four weeks.”
Perspectives from other analysts
Crypto analyst Nunya Bizniz has criticized the analysis by pointing out the differences in outcomes based on whether measurements are made on a logarithmic or linear scale. According to Bizniz, a linear projection suggests a price target near $121,947, while a logarithmic projection could see the price rise to around $309,295.
Measured travel goals on a log chart? pic.twitter.com/xiIfBGK8tR
— Nunya Bizniz (@Pladizow) June 13, 2024
Jonathan Hobbs, CFA, added a note of caution to the discussion, suggesting that projections at the higher end of this scale tend to attract significant attention and can disproportionately affect market sentiment. “It appears we are in the bull market stage where posting about the highest possible Bitcoin targets drives the most engagement,” he said.
At the time of writing, BTC was trading at $67,513.
Featured image created with DALL·E, chart from TradingView.com