Jim Cramer, the host of CNBC’s Mad Money, believes BTC might mirror its performance in the past year. He said this while looking closely into Tom DeMark’s technical analysis of the flagship cryptocurrency.
Specifically, Cramer pointed out how BTC slowly lost value starting April 2021 before the bearish market intensified in June, sending Bitcoin (BTC/USD) below $30,000.00 (£22,266.75).
According to Cramer, BTC lost more than half of its value in a matter of eight to 10 weeks. He pointed out that this kind of a meltdown might cause structural damage to a given market resulting in a laboured recovery that might not erase 50-60% of the losses before the decline resumes all over again.
He acknowledged that BTC performed exceptionally, seeing as it bounced right back, making a full recovery that saw it surge to a new all-time high (ATH) of $68,789.63 (£51,060.13) on November 10. However, the coin’s bullish momentum faded in the same month, sending the BTC and altcoins into a deep bear market.
This meltdown saw BTC plunge as low as $33,184.06 (£24,626.06) on January 24. At this point, the coin was down over 50% from its ATH in just 50 trading days. To this end, DeMark believes this crash might result in the crypto market suffering long-term structural damage, which could translate into a weak rebound when the market stops plummeting.
BTC might continue plunging
According to Cramer, DeMark bets that BTC will not make a comeback anytime soon. He pointed out that DeMark uses a 13-session countdown pattern that indicates whether a rally or decline is likely to an end.
Zooming into BTC’s seven-day chart, Cramer found that BTC’s sell-off is currently at 11. This means the coin only needs two more negative closes before investors start pumping money into BTC again.
At the moment, BTC is changing hands at $36,628.76 (£27,201.80) after gaining 8.13% over the past 24 hours. However, DeMark expects that this rebound will be short-lived, seeing as there is a chance that the market will experience a two or three-day panic selling climax, which might see the coin’s price fall to $26,355.00 (£19,578.47).
Explaining why he believes such a plunge is possible, DeMark focused on BTC’s chart from April to late-June 2021 and compared it to when the coin started losing value in November. Notably, the degrees of both declines are similar, meaning history might easily repeat itself.
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