RUNE / TetherUSLong
Technical Analysis of the Cuphead pattern
The current setup presents a classic cup-and-handle pattern, visually resembling the shape of a "Cuphead" character. This structure typically indicates a bullish continuation, as it forms after a period of consolidation within a broader uptrend.
Cup Formation:
Left Side of Cup: The pattern began after a pullback from recent highs, creating the initial drop and rounding bottom, representing the "body" of the cup (or "Cuphead's" round head).
Base of Cup: The support level at the bottom is significant, where volume likely decreased, indicating seller exhaustion and setting a strong foundation.
Right Side of Cup: Price begins to rise again, completing the rounded shape and signaling a renewed bullish sentiment as buyers regain control.
Handle Formation:
Handle Decline: The handle forms as a slight pullback from the right side of the cup, usually about one-third of the cup's height. It indicates a final consolidation before a breakout and serves as "Cuphead’s" handle.
Handle Length: The handle length should not exceed half the cup's height, as longer handles might signify weakening bullish momentum.
Volume Analysis: Look for decreasing volume during the handle formation, indicating weaker selling pressure, with an increase in volume as the breakout starts.
Breakout & Price Targeting:
Entry and Confirmation: A breakout above the handle’s resistance confirms entry into a long position, with a volume surge as buyers push the price upward.
Price Targets:
First Take Profit: At 100% profit, calculated based on the initial entry price and set to secure gains once the target is reached.
Second Take Profit at Cycle Highs: For further gains, the final target is set at cycle highs, leveraging the bullish momentum and trend continuation.
Risk Management:
Stop-Loss Placement: A conservative stop-loss can be set slightly below the handle’s low to protect against unexpected reversals while allowing some room for price fluctuations.
Trend Monitoring: Keep an eye on volume and candlestick patterns post-breakout to ensure continued bullish momentum, adjusting stops accordingly to lock in profits.
Cup Formation:
Left Side of Cup: The pattern began after a pullback from recent highs, creating the initial drop and rounding bottom, representing the "body" of the cup (or "Cuphead's" round head).
Base of Cup: The support level at the bottom is significant, where volume likely decreased, indicating seller exhaustion and setting a strong foundation.
Right Side of Cup: Price begins to rise again, completing the rounded shape and signaling a renewed bullish sentiment as buyers regain control.
Handle Formation:
Handle Decline: The handle forms as a slight pullback from the right side of the cup, usually about one-third of the cup's height. It indicates a final consolidation before a breakout and serves as "Cuphead’s" handle.
Handle Length: The handle length should not exceed half the cup's height, as longer handles might signify weakening bullish momentum.
Volume Analysis: Look for decreasing volume during the handle formation, indicating weaker selling pressure, with an increase in volume as the breakout starts.
Breakout & Price Targeting:
Entry and Confirmation: A breakout above the handle’s resistance confirms entry into a long position, with a volume surge as buyers push the price upward.
Price Targets:
First Take Profit: At 100% profit, calculated based on the initial entry price and set to secure gains once the target is reached.
Second Take Profit at Cycle Highs: For further gains, the final target is set at cycle highs, leveraging the bullish momentum and trend continuation.
Risk Management:
Stop-Loss Placement: A conservative stop-loss can be set slightly below the handle’s low to protect against unexpected reversals while allowing some room for price fluctuations.
Trend Monitoring: Keep an eye on volume and candlestick patterns post-breakout to ensure continued bullish momentum, adjusting stops accordingly to lock in profits.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.