Bitcoin’s ‘Cup and Handle’ Formation Suggests Imminent Bullish Rally Despite Recent Downtrend

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In the swiftly evolving ecosystem of cryptocurrency, Bitcoin, the world’s most valuable digital currency, has been trending lower in the past couple of weeks, remaining steadfast in a bearish formation. But this might be just the quiet before the storm as momentum appears to be gaining traction, preparing the stage for the bulls’ much-awaited moment.

Despite the plunge, market analysts continue to harbor hope, buoyed by an optimistic streak that sees Bitcoin surging to new heights. Their unwavering faith in the coin’s prowess is symbolized by the ‘Cup and Handle’ formation Bitcoin formed on the weekly chart. This potentially bullish pattern signals an imminent surge towards unexplored territories of value.

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The cryptic ‘Cup and Handle’ formation, familiar to savvy traders, emerged as a beacon for those looking to capitalize on Bitcoin’s potential resurgence. Enthusiasts have been closely eyeing the trend with bated breath, keenly monitoring the price movement that has stagnated since March.

An astute trader who goes by the screen name MikybullCrypto has spotted this trend in a recent analysis. The ‘handle’ of the pattern indicates the recent price descent from Bitcoin’s all-time highs. This is followed by the ‘cup,’ tracing the price dip in 2022 and subsequent recovery in 2023.

Historically, a breakout above the handle and the rim of the cup ushers in an era of a potential bullish rally. According to MikybullCrypto, if the preference of the traders leans towards buying, a pronounced break through the current price echelons and the all-time high of $73,800 could result in a berserk ‘bull run.’

Currently, Bitcoin is treading a descending channel, resisted by clear, predefined levels in the immediate term around $66,000 and $72,000. A breakout from the daily chart’s candlestick pattern above these liquidation barriers could inspire a vigorous demand, skyrocketing Bitcoin to staggering new heights.

However, the silver lining on the horizon is offset by a considerable threat. The declining on-chain business activity, particularly in the aftermath of a brief surge due to the launch of the Runes protocol on Halving Day, conceals a possible storm brewing underneath.

According to YCharts, the transaction fees now sit at $3.206, having dwindled from over $128 on April 20. This shrinkage translates to reduced revenue for miners, increasing pressure on profit margins after Halving.

The financial challenges could incentivize the miners to liquidate a portion of their Bitcoin reserve. Their increased activity in the secondary market could exert more downward pressure on Bitcoin’s prices, potentially tipping the scales in favor of the bears.