July 3, 2022

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Tom DeMark identified the downside to bitcoin in March.  Here's the good and bad news that the technical strategist now has about cryptocurrency.

Tom DeMark identified the downside to bitcoin in March. Here’s the good and bad news that the technical strategist now has about cryptocurrency.

Strategist Tom DeMark said in March that bitcoin could drop to $18,418 — back when the cryptocurrency was trading at $48,000.

The volatile weekend saw BTCUSD,
-1.48%
It briefly traded at less than $18,000, with around $20,000 trading on Monday, down about 70% from its November date. 10 peak from $68,924. The value of Bitcoin collapsed as the Federal Reserve started raising interest rates.

DeMark indicators attach great importance to the number of days, which do not have to be consecutive, as there was a lower close than the close two days ago. Taking into account different conditions, when the countdown reaches 13, a buy signal is triggered. (The opposite applies to sell signals). To put it more simply, his analysis looks for both overbought and oversold signals.

Tom DeMark says his indicators have spotted the tops and bottoms of bitcoin.

In an analysis provided exclusively to MarketWatch, DeMark says permanent damage has been done because bitcoin has fallen more than 50% from its peak. In the previous declines, Bitcoin held the 50% retracement levels.

See previous story: Technician who called the market bottom of 2020 says there’s a ‘shocking spike’ in store

Says DeMark, Founder and CEO From DeMark Analytics and advisor to hedge fund manager Stephen A. Cohen. “Such disruptions will require a high-probability recovery to bitcoin’s all-time highs that will take many years, if not decades, to achieve.”

By comparison, it took 25 years for stocks to break their September 1929 high.

But like the stock market after 1929, there can be a rally. “This does not negate the possibility of a recovery of up to 50-56% over the coming months, which would imply a rise in Bitcoin to $40,000-$45,000.”

There may be some good news in store for bitcoin investors.

Depending on the timing model applied, bitcoin registered a buying countdown of 12 or 13 on Saturday morning. “Since this was achieved over the weekend and the 7-day chart, there is still a modest risk of 2 lower and a close from next week’s Saturday levels. Regardless of a close above the close 4 days ago followed by the next trading day with a higher and close Higher, the trend should reverse upward,” he says.

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