CNBC’s Jim Cramer on said Bitcoin could lead a rally over the next few months, though it could take years before it rebounds to its all-time highs.
“The charts, as interpreted by Tom DeMark, suggest that bitcoin could have a nice relief rally over the next few months, even if he doesn’t see it revisiting its old highs for years or even decades,” he said.
“I can’t countenance buying crypto here, but if you still own some and you want out, I’m betting that from this, if you’re another dip down, you might get a better price to get out,” he added.
The cryptocurrency market has witnessed a blood bath as investors were terrified by inflation and the Federal Reserve’s interest rate hikes. The fear of the unknown has led to a major sell-off in risky assets resulting in a crypto market meltdown. Bitcoin, the largest cryptocurrency by market value, has plunged far from its record high reached last November, with some predicting it will continue to fall further.
According to the “Mad Money” host, DeMark has a 13-step buy and sell countdown that helps him identify tops and bottoms in bitcoin. A certain number of sessions go in the same direction and eventually the buying or selling exhausts itself, he said.
Cramer argued that bitcoin never had a downside retracement of more than 50% on a closing basis since 2020 – until a few months ago.
“According to DeMark, when you get a decline this ugly … it often does structural damage to the asset in question,” he said. “If you’re thinking long-term, DeMark says that it could take many years for bitcoin to come near its old highs, maybe even decades. It’s possible we’ll never see them again,” he added.
However, that doesn’t mean bitcoin can’t bounce, according to Cramer.