CNBC presenter Jim Cramerbelieves that Ethereum (ETH) may be on the verge of a trend reversal.
Speaking on CNBC’s Mad Money, Cramer says that ETH is signaling that the downtrend has gone to the extreme, based on a tool also called the sequential indicator, created by veteran technical analyst Tom DeMark.
.@JimCramer is going off the charts to find out if ethereum has hit a bottom or if there’s more downside in store for the token pic.twitter.com/Z68gl40RT2
— Mad Money On CNBC (@MadMoneyOnCNBC) January 25, 2022
“Ethereum has reached stage 13 in DeMark’s acquisition countdown for the first time since the peak. This level says a trend break could mark the bottom.”
The sequential indicator is used to analyze price data to determine the strength or weakness of a market trend and the probability of a reversal. The countdown phase of the row indicator measures the exhaustion of buyers and sellers determined by the direction of the current trend. The number 13 in the countdown phase of the ordinal indicator tells that the current trend is ready to reverse.
The CNBC host added that for the bottom to be considered “sustainable”, a bearish price target must be met, which Ethereum has already done.
“To achieve a sustainable bottom, DeMark needs to see something reaching its bearish price targets. But fortunately, Ethereum has already broken the downside price projection of $2,434.”
Cramer says that although Ethereum signals that it may have bottomed out, it could still drop lower.
“In short, Ethereum has all the ingredients for a trend extinction bottom according to DeMark’s methodology. However, this does not mean that Ethereum will not fall. If we experience another panic crash, it could see Ethereum temporarily drop to the selling peak of $1,859.”
Ethereum was trading at $2,481 at the time of writing.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.