CNBC’s Jim Cramer said on Wednesday that Bitcoin could see a rally over the next few months, although it could take years before it reaches its old highs.
“The charts, as interpreted by Tom DeMark, suggest that Bitcoin could make a nice recovery over the next few months, even if he doesn’t see it revisit its old highs for years or even decades.” He said.
He added, “I can’t accept buying cryptocurrencies here, but if you still own some and want to dispense with them, I’m betting that if you drop again, you might get a better exit price.”
The cryptocurrency market has had almost a year as investors feared inflation and the Federal Reserve sold their assets, sending the crypto market down. Bitcoin, the world’s largest cryptocurrency, has slipped away from its highs reached last November, and some predict it will fall further.
According to the “Mad Money” host, DeMark has a 13-step buying and selling countdown that helps him identify the tops and bottoms of bitcoin. A certain number of sessions go in the same direction, and eventually the same exhausts are bought or sold, he said.
In his analysis of DeMark analysis, Cramer examined the daily chart of bitcoin from April last year to today. This is the graph:
One of the highlights of the chart, Cramer said, is that Bitcoin hasn’t seen a downward bounce of more than 50% on a closing basis since 2020 – until a few months ago.
“According to DeMark, when you get a drop in that ugly shape…it often leads to structural damage to the asset in question,” he said. He added, “If you’re thinking long-term, DeMark says it could take many years for bitcoin to approach old highs, maybe even decades. We probably won’t see them again.”
However, that doesn’t mean bitcoin can’t bounce, according to Kramer.
For further analysis, watch Kramer’s full explanation video below.