Charts suggest the selling in bitcoin and ether may be over soon, says Jim Cramer

Charts suggest the selling in the world’s two largest cryptocurrencies may run its course soon, CNBC’s Jim Cramer said Monday, leaning on analysis from veteran technician Tom DeMark.

“When the charts, as interpreted by Tom DeMark, say 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 “Mad Money” host said.

“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,” added Cramer, who personally owns some ether, which runs on the ethereum blockchain. He previously owned bitcoin, as well.

Bitcoin earlier Monday reached its lowest point since July when it fell to $32,982.11 per token, according to Coin Metrics. However, bitcoin reversed course during the trading day, ultimately moving higher to around $36,000. The cryptocurrency remains well off its all-time high of nearly $69,000 reached in the fall.

Ether also touched its lowest level since July on Monday, falling as low as $2,176.41 before paring some of those losses, according to Coin Metrics. It’s down about 50% from its all-time high.

Bitcoin

While there’s a risk that bitcoin’s steep decline in recent weeks could cause structural damage to the cryptocurrency, Cramer said DeMark is betting that will not happen — just like bitcoin’s roughly 56% drawdown from April to June 2021 didn’t prevent it from setting new highs in the fall.

Technical analysis from Tom DeMark showing bitcoin’s angle of descent.

Mad Money with Jim Cramer

In fact, DeMark notes that bitcoin’s current angle of descent is identical to its 2021 plunge, Cramer said. “In other words, there’s a good chance that history continues to repeat itself.”

Looking specifically at bitcoin’s recent trading, Cramer said the cryptocurrency is at No. 11 of DeMark’s well-known 13-session countdown pattern, which the technician uses to identify when a rally or decline will be exhausted.

Tom DeMark’s 13-session countdown pattern for bitcoin.

Mad Money with Jim Cramer

“We need two more negative closes before his buy trigger fires,” said Cramer, who added that DeMark also would like to see bitcoin test his downside price targets.

If Monday’s intraday turnaround ends up leading to only a brief rally, “DeMark wouldn’t be surprised to see bitcoin getting hit with a two- or three-day panic selling climax, which could briefly take it all the way down to 26,355,” Cramer said.

Ether

Tom DeMark’s technical analysis for ether, including two downside price projections.

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