Main Points:
- Bitcoin faces potential decline to $62,000 due to a “Simpson Pattern.”
- Traders exhibit caution despite recent upward movement.
- Key support levels include $63,500 and $62,200.
- Mixed opinions on whether a clean retest at $62,700 will lead to further gains.
- Broader perspective sees Bitcoin aligning with historical post-halving trends.
Recent Bitcoin Performance and Market Sentiment
Bitcoin (BTC) has shown a strong performance, hovering around $64,000 as of late August. However, analysts warn of a potential pullback, which could see BTC drop to $62,000 or lower. This prediction is rooted in a technical formation known as the “Simpson Pattern,” where quick surges are often followed by equally rapid declines.
Data from Cointelegraph Markets Pro and TradingView indicate that BTC/USD maintained its gains after a brief surge caused by the U.S. Federal Reserve’s suggestion of a potential interest rate cut in September—the first since 2019. Although Bitcoin initially lagged in its response, it eventually reached a two-week high close to $65,000 before slightly retreating.
The “Simpson Pattern” and Potential Decline
The cautious tone in the market is exemplified by trader CrypNuevo, who points to the order book liquidity favoring a move towards support levels. His analysis suggests that a drop could trigger stop-loss orders, especially for traders who entered the market late. Specifically, he highlights the 50-period Exponential Moving Average (EMA) on the one-hour and four-hour charts as key levels to watch.
CrypNuevo’s analysis predicts that Bitcoin could return to its 50-hour and 50-four-hour EMAs, leading to what is known as a “Bart Simpson” pattern. This could trap breakout traders and lead to a subsequent “long squeeze,” where forced liquidation of long positions drives the price down further. The critical levels identified include $63,500 and $62,200, which are seen as possible areas where more liquidations could occur.
Diverging Opinions Among Traders
Not all traders share the same outlook. For instance, trader ELM expects a continued upward movement after a possible dip to $62,700. Meanwhile, Crypto Chase, another popular trader, expresses skepticism about buying Bitcoin after a clean retest at $62,700. He argues that historically, such clean retests often fail to yield significant gains.
Crypto Chase instead advises caution, suggesting that a clear breakout above $65,700 would provide a stronger bullish signal. On the other hand, if Bitcoin retests the $60,000–$61,000 range, traders should closely monitor the market’s reaction. Depending on the price action, he suggests either a long position targeting $65,000 or a short position aiming for a drop below $57,500.
Broader Market Outlook and Historical Trends
Expanding the view, trader and analyst Rekt Capital offers a more optimistic perspective. He observes that Bitcoin is on the verge of reclaiming the “post-halving reaccumulation range,” a key area following April’s block reward halving. According to Rekt Capital, this reaccumulation phase is a significant technical event that aligns with Bitcoin’s historical post-halving price behavior.
Rekt Capital emphasizes that Bitcoin is essentially realigning with its historical trend, which has seen the cryptocurrency resume its bullish trajectory after similar halving events in the past. He supports this view by comparing the current price action to the post-halving movements observed in 2020, suggesting that Bitcoin could follow a similar pattern in the coming months.
