Former hedge fund manager Jim Cramer has revealed that the two largest cryptocurrencies by market capitalization, bitcoin ($BTC) and ether ($ETH) may be close to bottoming out , based on analysis from veteran technician Tom DeMark.
Cramer, who is the host of CNBC’s show “Mad Money w/ Jim Cramer” and a co-anchor of CNBC’s “Squawk on the Street,” has revealed Tom DeMark’s analysis shows that “ both bitcoin and ethereum could be looking at downside trend exhaustion bottoms this week, if not today, I think you need to take him seriously.”
The former hedge fund manager, who personally owns some ETH and has previously owned BTC, added:
To me, that says it might be too late to sell and you need to consider buying. I know I am, especially if we get a final leg down.
Looking at DeMark’s analysis, Cramer said that while steep declines such as the one BTC has been seeing over the last few weeks could cause structural damage to the cryptocurrency, DeMark is betting that’s not happening, and pointed to BTC’s 56% drawdown from April to June 2021, which didn’t prevent the cryptocurrency from moving higher in the fall.
According to the former hedge fund manager, DeMark noted that bitcoin’s current drop is identical to the one seen last year, which to Cramer means “there’s a good chance that history continues to repeat itself” and BTC moves higher in the near future.
Cramer added BTC is at no.11 of DeMark’s 13-session countdown pattern, which the technician uses to identify when a rally or decline may become exhausted and reverse. Per Cramer we “need two more negative closes before his buy trigger fires.”
Bitcoin is currently trading at around $36,600 after moving up over 10% in the last 24-hour period. The cryptocurrency is down over 29% in the last 30 days, as it was trading above $51,000 a few weeks ago, CryptoCompare data shows.
If the current rally ends too soon, however, Cramer said DeMark “wouldn’0t be surprised” to see a “two- or three-day panic selling climax” that could see the price of the flagship cryptocurrency plunge to $26,355.
As for ether, the cryptocurrency has “already hit 13 on his buy countdown for the first time since the peak,” and ETH has fallen beneath the technician’s downside price projection of $2,434. He added there may still be more downside, however:
If we get another panicked breakdown, he could see [ether] temporarily dipping to $1,859 in a selling climax, but that would be your moment to buy, not sell, into the teeth of the panic
As CryptoGlobe reported Michael Bucella, a general partner at cryptocurrency investment firm BlockTower Capital, has revealed he believes bitcoin is still in a “long term bull trend” after analyzing the cryptocurrency’s price action through a logarithmic chart and suggesting BTC’s rise last year wasn’t sustainable.
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