Bitcoin Chart Update: BTC/USD bulls fight against “Bart Simpson”

The first digital currency settled above $9,600 during early Asian hours on Thursday. The coin has gained 1.7% in the recent 24 hours and stayed mostly unchanged since the beginning of the day as the market has started a slow recovery process after a sharp sell-off on Tuesday, June 2. Bitcoin’s market capitalization increased to $117 billion, while its dominance dropped to 64.6%.

Bitcoin has been extremely volatile at the beginning of the week as a sharp growth towards $10,414 was followed by the collapse towards $9,300. With the subsequent recovery to $9,600. Basically, BTC/USD has returned to the range that preceded the price increase. 

“Bart Simpson” pattern

This action resulted in a chart formation known as “Bart Simpson” pattern on the intraday charts. The pattern resembles the hairstyle of a popular cartoon character as a sharp growth is followed by a range-bound trading and a subsequent swift drop.

BTC/USD 1-hour chart 

Notably, this pattern is typical mostly to cryptocurrency assets they are more volatile than the traditional financial instruments. Experts believe that Bitcoin is influenced by many conflicting factors and it has yet to establish itself as either safe-haven or risky asset. Significant changes in demand and unstable correlation to other assets and global events create such “Bart Simpson situations”.

As a result of substantial short-term shifts and increases in liquidity, this pattern will continue to rear its Bart Simpson head several more times during the current global recession and potential recovery following the lockdown orders, Marc Grens, co-founder and president of DigitalMint, commented as cited by Bloomberg.

Also, the pattern is often explained by market manipulations as large players try to squeeze weak hands out of the market.  

Where from here

Bitcoin returned inside the previously broken triangle pattern. Now the coin stays close to its upper boundary. If it is broken, the upside momentum will gain traction with the next focus on $10,000. However, we may see a retreat towards the lower line of the recent range of $9,400 before another bullish leg. The critical support is created by psychological $9,000 which is strengthened by the lower boundary of the triangle pattern.

BTC/USD daily chart