Jim Cramer said Monday that given the technical outlook for Bitcoin and Ethereum, it “might be too late to sell,” urging investors to “consider buying.”
The brutal sell-off that saw Bitcoin (BTC) and Ethereum (ETH) plummet more than 50% from their all-time highs may be over, according to CNBC’s Jim Cramer.
On Monday, the “Mad Money” host looked at the technical outlook for the two cryptocurrencies.
He highlighted Tom DeMark’s analysis on price rallies and sell-off patterns to conclude that the selling that decimated cryptocurrencies these past few weeks could be about to end, if not already hit exhaustion levels.
“When the charts, as interpreted by Tom DeMark, indicate that Bitcoin and Ethereum may be looking at downtrend exhaustion lows this week, if not today, I think you need to take it seriously.,” he noted.
Using DeMark’s analysis pattern shows that Bitcoin’s last major tumble in April-June of last year bears a similarity to this month’s drawdown. On that major leg down in 2021, BTC price fell a cumulative 55.89%, before a parabolic rally that saw it hit a new peak above $69,000.
Cramer pointed to the analyst’s chart showing the drawdown form that ATH carries a similar projection. According to the investor, “there is a good chance that history will continue to repeat itself”. In this case, he believes there is potential for a new rally for BTC.
The chart also shows that Bitcoin’s price decay has pushed through 11 of the 13 sell-off sessions on a countdown to an exhaustion bottom. It means BTC could still see two more negative closes, with a potential decline to lows of $26,355, before DeMark’s buy signal triggers.
As for Ether, the native token of the Ethereum network, the chart shows that the descent “has already reached 13” on DeMark’s countdown to a buy trigger. Like Bitcoin, Ethereum could also be “watching a bottom of trending exhaustion,” Cramer explained.
With the sell-off pushing ETH to lows of $2,100 this week, the “Mad Money” host thinks another leg down could briefly see ETH/USD retest the $1,859.
What does this mean for anyone looking to cash in on the correction? Cramer thinks selling at this point isn’t an ideal decision.
“To me, that says it might be too late to sell and you need to consider buying, especially if we get a final leg down,” he said.
Bitcoin is currently trading around $36,349 after a strong overnight rally that included a 10% jump to hit intraday highs of $37,475. Ethereum is also up in intraday moves, currently hitting the $2,420 level after testing lows of $2,180.
