- The altcoin market’s Cup & Handle pattern signals a bullish breakout, with a crucial retest phase determining future gains.
- If support holds at $1.21T, buyers could regain control, driving a strong rally in line with historical market behavior.
- Sentiment and technicals favor further upside, reinforcing the Cup & Handle breakout and potential continuation of the uptrend.
Merlijn The Trader has highlighted a technical pattern in the altcoin market. A possible bullish breakout is indicated by the emergence of a “Cup and Handle” formation, which indicates upside potential if the market maintains its present support level. The breakout has already occurred, and now, the price is undergoing a crucial retest phase.
Cup and Handle Formation: A Bullish Signal
The altcoin market cap, excluding Bitcoin, has exhibited a textbook Cup and Handle pattern in a two-week timeframe. This structure indicates an accumulation phase followed by a breakout. The cup formed after a major decline from 2021 to mid-2022 when the market found a bottom. Consequently, a gradual recovery led to the rounded base of the cup.
By late 2023 and early 2024, the market reached a resistance level. However, after testing resistance, a pullback followed, shaping the handle. This formation is a classic bullish continuation signal, implying further upward movement if key support holds.
Breakout and Retest: Key Levels in Play
The bullish setup was confirmed when the market just broke above the resistance. But then there was a drop, and the price returned to the breakout level. This retest stage is crucial because it establishes if the prior resistance becomes firm support.
As of right now, the market capitalization is around $1.21 trillion, down $39.67 billion (-3.17%). A green circle on the chart indicates the retest zone, which is a crucial support level. Buyers could launch a powerful rally if they protect this area.
What to Expect Next?
Historical price action suggests a strong recovery phase, aligning with market psychology. After a prolonged accumulation period, early sellers often trigger brief pullbacks. However, if support holds, buyers regain control, driving prices higher.
Additionally, technical indicators favor further gains. The market’s trend remains upward, supporting the Cup and Handle thesis. Moreover, sentiment within the crypto space has improved, further fueling expectations of a bullish continuation.
