Technical strategist Tom DeMark said in March that bitcoin could fall as low as $ 18,418 – back when the cryptocurrency traded as high as $ 48,000.
An unstable weekend had bitcoin BTCUSD,
traded short below $ 18,000 as it traded around $ 20,000 on Monday, down around 70% from the November 10 high of $ 68,924. Bitcoin has collapsed in value as the Federal Reserve began to raise interest rates.
DeMark’s indicators place great emphasis on the number of days, which need not be consecutive, where there was a closure lower than the closure two days ago. Subject to various conditions, when the countdown reaches 1[ads1]3, a buy signal is triggered. (The opposite is true for sales signals.) Simply put, his analysis looks for both overbought and oversold signals.
In an analysis given exclusively to MarketWatch, DeMark says that lasting damage has been done because bitcoin has fallen more than 50% from the top. In previous declines, bitcoin held 50% retracement levels.
See previous history: The technician who called the bottom of the 2020 market says a “shocking rally” is pending
“Typically, structural long-term damage is inflicted on a trend when a retracement exceeds 56%,” said DeMark, founder and CEO of DeMark Analytics and hedge fund manager Steven A. Cohen. “Such collapses show a high probability that recovery to all-time bitcoin heights will require many years, if not decades, to achieve.”
As a comparison, it took 25 years before the shares exceeded the previous peak in September 1929.
But like the stock market after 1929, there may be an upswing. “This does not deny the prospect of up to 50-56% recovery in the coming months, which means that the bitcoin rally will return to $ 40,000- $ 45,000.”
Depending on the time model used, bitcoin recorded the countdown for purchases 12 or 13 Saturday morning. “Since this was achieved over a weekend and a 7-day chart, there is still a modest risk of two lower lowest levels and closing than Saturday levels next week. Regardless of when there is a closing above the closing 4 days before followed by the next trading day with a higher high and close, the trend should turn upside down, he says.