📘 What is a Cup & Handle?
$XLM spent 3 months drawing a slow U on the daily chart, climbed back to its June high, and is now dipping again. That shape is today's live lesson: the cup & handle.
A cup & handle is a bullish continuation pattern. Price makes a high, sinks slowly into a rounded bottom (the cup), climbs back to the old high, then makes a small, quiet pullback (the handle). A close above the rim is the signal that buyers took control again.
📊 Live chart in the cover and in the image post below.
🔍 How to spot it
• Start with an uptrend before the pattern
• The cup is round like a U, not a sharp V. A slow bottom means sellers ran out of steam
• Both rims sit at roughly the same price
• The handle is a short pullback after the right rim, usually on lower volume
• The handle should stay in the top half of the cup. A deeper handle weakens the pattern
• Volume often rises on the right side of the cup and dries up in the handle
📈 How traders use it
• Entry: on a candle CLOSE above the rim line, ideally on rising volume
• Safer entry: wait for a retest of the rim from above
• Stop-loss: below the handle low. If the handle breaks, the setup is gone
• Target: measure the cup depth (rim minus bottom) and add it to the rim
🧪 Live example: $XLM daily, June – October 2026
The cup:
• Left rim: June 16–19 highs around $0.234–0.235 (a wick even tagged $0.252 on June 18)
• Slow slide through July and early August
• Cup bottom: $0.1524 on Aug 18
• Right rim: $0.2371 on Sept 29, almost exactly the old highs
Cup depth = $0.2371 − $0.1524 = about $0.085, or 36% below the rim.
The handle (now):
• Pullback from $0.2371 to a low of $0.2024 today, about −15%
• That is 41% of the cup depth. Still in the top half (the cup midpoint is ~$0.195), but on the deep side
• Daily volume fell from about $71M on Sept 28 to under $25M a day in October. Quiet handles are what you want to see
Right now XLM trades near $0.207. Daily RSI(14) is about 50, neutral. Price just slipped under the 20 EMA ($0.210) and is testing the 50 EMA (~$0.200).
What it means: this is a candidate, NOT a confirmed pattern. A daily close above $0.2371 would confirm it. The measured target would then be about $0.237 + $0.085 = ~$0.32. If the handle loses ~$0.195 (half the cup), the pattern is broken.
For comparison, $BTC is not in a cup now. It was rejected near $87K four times and slid to $83,577 today. No rounded base, no handle.
⚠️ Common mistakes
• Calling a sharp V-bounce a cup. The bottom must be rounded
• Buying inside the handle before the breakout. Many handles keep falling
• Ignoring a handle that drops below half the cup
• Using the target as a promise. It is only a measured guide
✅ Quick checklist
• Uptrend before the pattern?
• Round U-shaped bottom, rims at similar prices?
• Handle shallow (top half of the cup) and on lower volume?
• Daily close above the rim?
• Stop below the handle, target = cup depth added to the rim?
💬 Have you ever caught a cup & handle breakout? Did it reach the target? 👇
Not financial advice. DYOR.