On the Worldwide Exchange, Panigirtzoglou said that Bitcoin trading on Tuesday accounted for approximately $670 billion and was under $36,000 on Tuesday during the interview.
“It was like 60 percent back in early April,” Panigirtzoglou said. “A healthy number in terms of bitcoin sales as a percentage of total cryptocurrency market cap is 50% or higher. That, I believe, is another indicator to keep an eye on in terms of whether or not the bear market has ended.”
While its price has recently stabilized, bitcoin has struggled in the two months since its peak. Bitcoin was still on the rise in early April, eventually reaching an all-time high of nearly $65,000 per token on April 14. It was around $29,000 at the start of the year.
One week ago, the cryptocurrency briefly fell below $29,000, briefly turning negative for the year. Bitcoin finished the day slightly higher, at around $32,500. Bitcoin had roughly the same dominance as it does today as a percentage of the total crypto market cap at the time.
One factor cited as fueling bitcoin’s massive rally late last year and into 2021 was institutional investment in the digital asset, typically via CME bitcoin futures or the Grayscale Bitcoin Trust.
Panigirtzoglou closely monitors those institutional flows, and his research on the subject is widely read on Wall Street. In May, he wrote in a note to clients that institutional investors were abandoning bitcoin in favor of gold, a report that some traders believe contributed to the cryptocurrency’s steep drop that month.
Panigirtzoglou maintained his bearish outlook on bitcoin in a note last week, citing a lack of appetite among institutional investors to take advantage of the pullback.
“For the time being, we are still stuck. We aren’t seeing as much buy-the-dip activity as we did in the fourth quarter of last year or the first quarter of this year,” Panigirtzoglou told CNBC on Tuesday.
The analyst stated that he believes there will be a price level at which bitcoin will once again be appealing to large investors, but he did not specify where that price level might be.
“I think the lesson from the last few months is… bitcoin is not price insensitive, and there will be a price where institutional interest will pick up, I believe, with respect to volatility, so that’s more important,” he said.
The crypto market
“I went back to Ethereum, as bitcoin had held [$30,000],” Cramer said in “Squawk Box,” referring Bitcoin’s stability above that critical support level, briefly falling below $29,000 last week after the cryptocurrency.
Cramer announced exactly one week ago that he had “sold almost all of my bitcoin,” citing, in large part, concerns about China’s crackdown on bitcoin mining and other crypto-related activities.
Bitcoin, the world’s most valuable cryptocurrency, was trading around $34,400 per unit on Monday morning. However, it is down 47 percent from its all-time high near $65,000 in April.
Ether was up more than 10% on Monday, trading slightly above $2,000. However, it is still down more than 50% from its all-time high of over $4,300 on May 12.
Cramer had indicated nearly a week before that he had sold half of his ether holdings as the cryptocurrency broke the $3,400 barrier.
Cramer said on Monday that he decided to increase his ether position because he believes it has more everyday utility than bitcoin, which many crypto bulls regard as a store of value akin to digital gold despite the fact that some businesses accept it as payment. “I like Ethereum because people are using it much more to buy things, and I will continue to buy Ethereum,” Cramer said. “I believe it has a little more game, because when you go buy an NFT or anything like that, everyone wants it in Ethereum. It’s more of a medium of exchange.”
An NFT, or nonfungible token, is a digital asset that is one-of-a-kind by design, with ownership recorded on a blockchain, a decentralized digital ledger.
NFTs skyrocketed in popularity earlier this year for everything from basketball highlights to rock albums to digital artworks, including one sold for $69 million by artist Beeple. While there are signs that the initial NFT craze has subsided, supporters of the asset class and blockchain technology in general see a bright future.
The Ethereum blockchain is home to many applications for so-called decentralized finance, or DeFi. DeFi aims to use cryptocurrency to recreate aspects of the traditional financial system.