Strategist Tom DeMark said in March that bitcoin could drop to $18,418 — when the cryptocurrency was trading at $48,000.
The volatile weekend saw BTCUSD,
Briefly trading below $18,000, it traded around $20,000 on Monday, down around 70% from the November 10 peak of $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.
In an analysis provided exclusively to MarketWatch, DeMark says lasting damage has been done because bitcoin has fallen more than 50% from its peak. In the previous declines, Bitcoin held the 50% retracement levels.
Says DeMark, Founder and CEO From DeMark Analytics and advisor to hedge fund manager Stephen A. Cohen. “Breakouts like these suggest that the high probability of a recovery to all-time highs for bitcoin 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 rally in Bitcoin to $40,000-$45,000.”
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 lows 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 a higher close, the trend should reverse higher,” he says.
“Beer buff. Devoted pop culture scholar. Coffee ninja. Evil zombie fan. Organizer.”