While cryptocurrency is constantly changing, one value that has persisted since the early days is an unwavering commitment to memes. From HODL to BearWhale, the crypto community has primarily kept the culture of the sphere lighthearted and playful. The most recent manifestation of this is the infamous Bart Pattern, a price pattern so peculiar that its wonky formation could only occur in such a zany market as cryptocurrency.
Spotting the Bart Pattern
The Bart Pattern occurs with a sudden, immediate rise in price, which takes the visual form of a massive green candle. This candle is then followed by a horizontal movement that appears directly perpendicular to the first candle. After the horizontal movement comes a final red candle, equal in size to the first pump, and represents a similarly fast-moving dump that thus undoes the entirety of the initial growth.
— The Crypto Dog📈 (@TheCryptoDog) March 27, 2018
As seen in the image, the resulting chart closely resembles the jagged outline of popular animated TV show character Bart Simpson’s head. Either through a shift in market dynamics or simply through recognition of the pattern, the Bart Pattern, which was only characterized as such within the past month, seems to be appearing quite frequently, primarily on Bitcoin’s chart but also on those of other cryptocurrencies.
The Bart Pattern comes as the latest in a long series of crypto trading-related memes. While the phenomenon is humorous in nature, the underlying implications of Bart are not so joyous. The pattern seems to be unique to cryptocurrency, and certainly does not represent what appears to be natural price movement. Many speculators have suggested that massive, regular surges and free falls are symptomatic of a larger problem – market manipulation by institutional investors. The logic behind this is that large accounts are moving the markets to coincide with their BTC derivatives on the CME and Cboe.
Of course, this is not the only explanation for the Bart Pattern. Another, perhaps more plausible explanation involves the role of leveraged crypto positions. As more and more traders seem to be placing both leveraged long and short positions on Bitcoin and other leading altcoins, each sizable price movement – both upward and downward – could be sparking a squeeze wherein a number of margin traders are liquidated, thus magnifying the initial movement.
Another theory suggests that, at a very pivotal moment such as in the wake of an imminent reversal, investors on both sides are very anxious to place their entries. Essentially, sidelined money is waiting for a breakout to re-enter markets. Without a shift in support to compensate for a full reversal, the next course of action is a correction of the failed breakout.
Regardless, recent BTC price movements have been primarily Bart-free. While there have been a number of large green candles in recent days, supporters have been fortunate in not seeing said candles matched by red ones of equal size. Hopefully, a reversal will be cemented, and Bart will become a pattern that does not continue to repeat in the future.