Hi Shoppers,

Remember the cup and handle formation I have been talking about that is forming in the major indexes?

Well, I am also seeing it created in Bitcoin (Ticker: BTCUSD).

Regular Profits in Pumps readers know I look at BTC as something of a gauge of the overall market sentiment.

I know it is completely separate from the stock market, but there appears to be correlation.

In fact, for a while it was leading, in my opinion. It has backed off from that, but it definitely has a bullish cup and handle formation forming – plain as day.

Check it out:

The broader the base the more bullish the pattern.

Pretty cool, right?

You have to continue here to learn how to play it.

Cuppa

The cup and handle formation is a continuation pattern, meaning it is generally found within a trend.

In the case of Bitcoin (Ticker: BTCUSD), it has formed a base at the low, and it is not within a trend.

That doesn’t necessarily mean it cannot work.

The rule is to buy once the underlying has traded above the top of the cup (resistance) after it has created the handle.

In BTCUSD that level is $21,550.

The handle should take 7-28 days to form.

If BTCUSD does happen to break out, there is a way to trade the upside without having to buy Bitcoin.

It is ProShares Bitcoin ETF (TIcker: BITO) and here is the chart:

That downtrend line goes back to November 2021, so it is pretty powerful.

BITO has been struggling against it the last three days.

I will wait for BTCUSD to trade above $21,550 and price the calls in BITO for a cheap shot.

Right now, you can go to March expiration and nab the 14 calls for less than a dollar:

Pretty interesting and definitely something to watch.

Thanks for Reading … See You Next Tuesday,

Licia Leslie