An interesting technical formation is emerging in the cryptocurrency market that may signal the activation of an altseason — the cup and handle.
Cup and Handle Formation
The cup and handle formation often indicates a forthcoming price surge. It occurs when prices dip and then recover to a previous high (the 'cup'), followed by a smaller pullback (the 'handle') before breaking out. Recently, many leading altcoins, including Ethereum, Solana, and Cardano, have displayed this setup on higher timeframes.
Potential Breakout and Implications
If altcoins break through the upper resistance of the handle, technical traders expect a strong rally. Historically, cup and handle breakouts often lead to significant upside, especially in crypto markets known for rapid moves. This breakout may renew interest from both retail and institutional investors in altcoins, potentially leading to increased trading volumes and on-chain activity.
Monitoring Key Resistance Levels
Traders should closely monitor trading volumes and key resistance lines across the altcoin sector. A surge in volume during the breakout would serve as a robust confirmation of this bullish setup.
The cup and handle formation on altcoins presents a potential signal for the beginning of a new upswing in the market. The anticipation of a breakout and its implications may shift investor sentiment and boost interest in altcoins.
