CNBC host Jim Cramer believes that Ethereum (ETH) could be on the verge of a trend reversal.
On CNBC’s Mad Money, Cramer says that ETH is signaling that the downward trend is overdone based on a tool created by veteran technical analyst Tom DeMark called the Sequential indicator.
.@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 already hit 13 on [DeMark’s] buy countdown [phase] for the first time since the peak. That tells DeMark that we could be looking at a trend exhaustion bottom.”
The Sequential indicator is used to analyze price data to determine the strength or weakness of a market trend and the likelihood of a reversal. The countdown phase of the Sequential indicator measures the depletion of buyers and sellers as determined by the direction of the existing trend. A figure of 13 during the countdown phase of the Sequential indicator says that the existing trend is ready to reverse.
The CNBC host says that in order for the bottom to be considered “sustainable,” a downside price target needs to be hit, which Ethereum has already done.
“In order to get a sustainable bottom, DeMark also needs to see something hit his downside price targets. But fortunately, Ethereum already broke down to his downside price projection at $2,434.”
Cramer says that despite Ethereum signaling that it may have hit bottom, it could still drop to a lower level.
“In short, Ethereum has got all the ingredients for a trend exhaustion bottom according to DeMark’s methodology.
However, that doesn’t mean that Ethereum doesn’t go down. If we get another panic breakdown, he could see Ethereum temporarily dipping to $1,859 selling climax.”
Ethereum is trading at $2,535 at time of writing.
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Source: https://dailyhodl.com/2022/01/27/ethereum-eth-is-showing-signs-of-bottoming-out-according-to-cnbcs-jim-cramer-but-theres-a-catch/