Understanding the ‘Cup and Handle’ Pattern in Dogecoin
The ‘Cup and Handle’ is a popular chart pattern used in technical analysis, often seen as a signal for potential bullish continuation. In the context of Dogecoin (DOGE), this pattern has garnered attention as analysts observe its development in the weekly chart. Here’s what it means and why it’s significant:
What Is the ‘Cup and Handle’ ☕️Pattern?
The pattern consists of two primary parts:
1. The Cup:
• A rounded bottom resembling a “U” shape.
• This indicates a period of consolidation, where the price gradually declines and then recovers, forming a base.
2. The Handle:
• A smaller consolidation or pullback after the cup formation.
• It usually slants downward or sideways and represents a brief period of hesitation before a potential breakout.
How It Applies to Dogecoin:
• Current Observation: Analysts have noted that Dogecoin’s price chart has formed a rounded “cup” over several weeks, with a minor pullback suggesting the start of the handle.
• Significance: This pattern typically predicts a breakout above the resistance level at the top of the cup, signaling a strong bullish trend.
• Projection: If the breakout occurs, DOGE could experience a significant price surge, potentially aiming for levels like $1.38, as per the market experts.
Key Metrics to Watch:
1. Volume: A strong increase in trading volume during the breakout confirms the validity of the pattern.
2. Resistance Level: Monitor the resistance line at the cup’s rim. For DOGE, this level is where the price previously peaked before consolidating.
3. Handle Formation: The handle should not drop more than 50% of the cup’s height; otherwise, the pattern may lose its reliability.