There are some chart patterns that just keep showing up, over and over again.

Whether you’re trading growth stocks in the 90’s or altcoins in 2025, some setups have a way of repeating themselves like nature. One of the most powerful continuation patterns used by top traders like William O’Neil, Mark Minervini, and Stan Weinstein is the cup and handle.

You’ve probably heard of it before.

Maybe you’ve even seen it form on a chart, taken a trade, and watched it explode upwards (or fake out and move down).

But chances are, you’ve never fully broken it down in technical detail. You’ve never slowed down enough to ask:

• What actually creates the cup and handle pattern?

• What psychology is behind it?

• When does it work best and when does it fail?

• And how can I use this in the crypto market to spot major winners?

What Is the Cup and Handle Pattern?

The cup and handle is a bullish continuation pattern. That means it typically forms after an uptrend (after a coin has already shown strength) and signals that a new leg up could be forming.

The pattern gets its name because it literally looks like a teacup on a chart:

• The cup is a rounded consolidation phase. Price sells off, bases, then recovers back to prior highs.

• The handle is a smaller pullback or sideways drift that forms on the right side of the cup before a breakout.

When the price breaks out above the handle with volume, it often leads to explosive moves.

This is one of the exact setups that William O’Neil used to identify winning stocks like Cisco, Amazon, and Apple early on. Mark Minervini later expanded on it in Trade Like a Stock Market Wizard, emphasizing how tightness in the handle shows strong accumulation. Stan Weinstein focused more on stage analysis, but often highlighted this same setup when a coin or stock was breaking into Stage 2. We are taking this to the next step and adding all of these ideas to the crypto market before everyone else.

How to Spot a Clean Cup and Handle in Crypto

There are lots of fake or sloppy cup and handles. You want to look for patterns that meet this basic structure:

1. Cup Depth Shouldn’t Be Too Deep
   Ideally, the cup forms a rounded bottom, not a sharp “V.” A 20–40% pullback is reasonable in crypto. If the cup is too deep (like 70% or more), that’s usually not bullish but leans more to being broken.

2. Handle Should Drift Sideways or Slightly Down
   The handle is usually a light volume pullback of 5–20%, lasting a week to several weeks. If the handle breaks down too far, the pattern is invalidated. There are areas call a “cheat” where a handle can drop further than 20% and still recover to the upside.

3. Volume Dries Up During the Handle, Then Explodes on Breakout
   This is one of the most important signs. Tight price action on low volume during the handle, followed by a volume thrust on breakout, is ideal.

4. Buy Near the Breakout Point or Early in the Handle
   Time your buys to help you immediately get into profit. By buying on the breakout of a handle, cheat handle, or low cheat handle, you have the opportunity to limit risk while providing large upside.

5. Use Relative Strength
   This is one of Minervini’s secret weapons: don’t just buy any cup and handle. Buy the ones that are already outperforming Bitcoin. Use a Mansfield Relative Strength overlay to see if your coin is a market leader compared to BTC.

What Can Go Wrong?

Not every Cup and Handle leads to a breakout. Here are a few reasons it can fail:

• Volume doesn't confirm.
  If a coin breaks out above the handle with weak volume, it's likely a fakeout.

• Handle pulls back too far.
  A handle should be a light consolidation. If it drops too deeply (more than ~20–25%), that’s a red flag.

• Bitcoin starts dumping.
  The broader market still controls the tide. If BTC or ETH breaks support, it can wreck even the cleanest setups.

• You're looking on the wrong timeframe.
  A cup and handle on the 15-minute chart is not the same as one on the weekly. Make sure the timeframe matches your goal. I prefer weekly and daily timeframes.

You don’t need a million patterns to make money in crypto.

You just need a few great ones, and the discipline to wait for them.

The cup and handle is one of those great ones. It’s stood the test of time from the stock market legends to today’s top crypto traders. If you learn how to spot it, understand what fuels it, and apply it with conviction, you’re putting yourself in a position to catch the next massive breakout before the crowd.

The key is patience. These patterns take time to form. But when they do, they often lead to moves that make the waiting worth it (especially when you utilize this in a total market uptrend).

So keep watching. Keep scanning. And when you see a clean setup?

Be ready to take the shot.

Thanks,

Dawson