"Jack's Trading Classroom" BTCUSD Classic Bottom Pattern - Cup and Handle Pattern

Original Jack's Trading Classroom "BTCUSD Classic Bottom Pattern - Cup and Handle Pattern"

First, let's briefly introduce the classic bottom pattern that BTCUSD may be forming - the cup and handle pattern.

The cup and handle pattern is easily recognizable and assessable by experienced traders as a bottom formation pattern.

It is a classic bottom bullish pattern consisting of two main parts: the cup and the handle.

In the cup and handle pattern, the cup forms a smooth U-shaped bottom. Ideally, the heights of the left and right cup edges should be equal, although in most cases, the pattern is not so perfect.

The second part is the handle, which is a consolidation area established after an uptrend has formed.

The ideal entry point in the cup and handle pattern is after the formation of the handle. The cup and handle pattern is confirmed by the U-shaped cup and the handle. Breaking through the resistance at the cup edge is considered a correct buying point.

After briefly introducing the classic cup and handle pattern, let's take a look at the daily chart of BTCUSD. After the previous mentioned uptrend of BTCUSD reached a high of 10549.5, we can see that the BTCUSD price is approaching the previous high of 10558.0 from October 26, 2019. The price failed to break the previous high, and after the high could not be broken, the price retraced to around 9800.0. The original uptrend line has been broken. In this reasonable scenario, our long positions have already exited, waiting for an opportunity to re-enter.

In the chart, we can clearly see that the cup and bottom have formed perfectly, with the left and right cup edges being ideally equal in height. We are currently in the stage of short-term retracement and consolidation. The best entry point in the cup and handle pattern is a volume breakout at the top. After the breakout, we can expect a significant uptrend. In this cup and handle pattern, we incorporate the Fibonacci sequence. In our chart, we can see that this uptrend cycle is considered a complete wave, with the key price level of 61.8% Fibonacci retracement at 9720.0. The expected consolidation range's lowest point is the 61.8% Fibonacci support level. Based on historical records, this level has been a key support level for multiple rebounds. If the price successfully retraces to this support level at 9720.0 and breaks the previous high of 10549.5, it will be our best buying point. Upon retracing to 9720.0, we can adjust the upper bullish target to the 161.8% range at 13101.5. The stop-loss point for buying long positions after the breakout can be set at the low point of the handle.

Resistance Levels:

R1 10315.0

R2 11380.0

R3 11730.0

Support Levels:

S1 9419.0

S2 8972.0 (Fibonacci 61.8%)

S3 8633.0

S4 8290.0

S5 8089.0

S6 7202.0

S7 6436.0

S8 5227.0

In recent days, the cryptocurrency market has experienced significant volatility. It is recommended that operators strictly implement risk control and avoid high leverage and high contract volume operations to prevent additional losses caused by volatile market conditions. This article is for personal commentary only. Readers should use caution and discretion, as cryptocurrency trading may pose risks to your capital.

Further Reading

• "Jack's Trading Room" Short Commentary on BTCUSD Price Falling Below Ten Thousand Points
• "Jack's Trading Room" Mid-term Bullish Trend of BTCUSD Has Not Reversed Yet

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