“Giant mug with handle” – ETH confirms price target of 6,500 US dollars
ETH could rebound 60% in the coming sessions as the bulls put their hopes on a classic bullish continuation pattern.
As reported by independent on-chain analyst Matthew Hyland in. suggested tweets The price released on Monday could rebound from current levels near $ 4,211 to $ 6,500 or higher when a cup-with-handle pattern is completed.
Test again Perfect model cup handle
According to the Hyland chart, ETH is reversing in a correction that began after reaching a record high of USD 4,867 on 11/10.
Price rebounded slightly after testing the resistance of the cup-and-grip pattern as a temporary support, increasing the possibility of near-term expansion.
Weekly ETH / USD Price Chart | Source: TradingView, Matthew Hyland
Usually, the first attempt at a breakout from bullish technical setups usually requires further confirmation.
Notably, ETH’s initial uptrend tends to divide two groups of long buyers into the pattern with hopes of a breakout (but unfortunately a failed breakout) and those looking for a breakout with small profits lure the trap to defend the position.
But the game changes if the decline stops halfway, resulting in a sharp sideways movement or a rebound. As a result, short sellers lost confidence, while long positions that survived the previous pullback gained confidence in the dominant bullish technical lineup.
A positive rally will start an bullish round of movement, causing price to prepare for the final leg of the pattern – a strong uptrend. As Hyland has suggested, ETH is again testing the resistance of the “giant mug with handle” as support – a potential sign of a strong recovery.
Why $ 6,500?
A buy point in a mug with a handle arises when the price breaks the resistance and at the same time the volume increases.
Traders often estimate profit targets by measuring the distance from the top right of the cup to the bottom of the cup and then adding that to the buy point.
Weekly ETH / USD Price Chart and Cup-with-Handle Profit Target | Source: TradingView
The maximum depth of the cup is $ 2,500 while the breakout point is $ 4,100. Therefore, the pattern’s breakout target is at or above $ 6,500. research from Harvard University shows that the cup handle model has a success rate of 65% and 68% for the foreign exchange and stock markets, respectively.
Conversely, a break below the pattern’s resistance – which coincides with the support of the multi-month uptrend line – risks invalidating this bullish pattern. That could take ETH price to the next support level near $ 3,090.
Join Bitcoin Magazine Telegram to keep track of news and comment on this article: https://t.me/coincunews
According to Cointelegraph