I've noticed that many traders underestimate one of the most reliable figures in technical analysis. We're talking about the so-called "cup with handle" — a chart pattern that helps predict the continuation of an upward trend. William O'Neil, a well-known investor and creator of the CAN SLIM system, was the first to describe this pattern and noted that it often precedes a significant price increase.

When you look at the chart, the cup with handle pattern literally looks like its name. It starts with a wide and deep price decline, then a gradual recovery that forms a rounded cup. After the price reaches the previous high, there is a small pullback — this is the handle of the pattern. When the handle is complete, the price breaks through the resistance level and begins a new upward movement.

The formation process is quite interesting. First, the price drops from the maximum, creating the downward part — trading volumes are usually high here. At the bottom of the cup, the decline slows down, the market stabilizes, and volumes decrease. Then recovery begins — the price rises, forming the second half of the cup, and volumes increase again. This confirms that the market is genuinely interested in the asset.

The pattern can form over several weeks to several months depending on the timeframe. The depth is usually 30-50% of the initial price level. An ideal cup with handle looks symmetrical, with roughly equal parts in time and height. The handle should not be deep — typically no more than 15% of the cup's height.

How do I use this in trading? First, I look for a rounded shape on the chart, making sure that a handle is indeed forming after the cup. Then I wait for a breakout of the resistance level — this should be accompanied by high volume. I open a long position immediately after the breakout is confirmed. I set the target level by adding the cup's height to the breakout point. I place a stop-loss slightly below the lower boundary of the handle.

What do I like about this pattern? It is one of the most accurate chart tools. The pattern is simple enough to identify but provides clear target levels. Even a beginner can learn how to recognize it. I recommend novice traders practice on a demo account and historical data before applying the pattern in real market conditions. It’s also helpful to use additional indicators like RSI or MACD to confirm signals.

Of course, don’t forget about news and macroeconomic factors — they can significantly influence price movements. But if you understand the market and apply this pattern correctly, it can truly become a powerful tool for predicting trends. The cup with handle pattern is a classic in technical analysis that has been working for decades. Even with the current market volatility (BTC is now at around 79,636 with a 1.50% increase), such tools remain relevant for traders who want to trade more confidently and systematically.