Stock picker and CNBC commentator Jim Cramer has warned that the market is currently “the most overbought” it has been in a while.
This comes after the Bitcoin price scored its seven consecutive month in the green for the first time since 2012 and closed a monthly candle above the peak of the previous cycle.
An April Fools’ joke?
Some are speculating about whether or not Cramer’s tweet is simply an April Fool’s joke.
Other users have started mocking the analyst’s predictive power, arguing that his social media posts should be treated as contrarian indicators.
Last year, Tuttle Capital Management even decided to launch the Inverse Cramer exchange-traded fund, which would bet against the calls made by the controversial financial commentator. However, Cramer still got the last laugh since the ETF was forced to shut down in January after recording a negative 15% return.
Is the market overbought?
Bespoke Investment Group recently mentioned that overbought signals had started appearing across all index-based exchange-traded funds in the U.S.
The S&P 500 index, which tracks the performance of major companies listed on US stock exchanges, notched yet another all-time high of the year, surging to 5,250. It is up 22% over the past six months alone. The benchmark index kept surging despite reaching its most overbought level since 2020 in December.
After breaking its longstanding correlation with tech stocks last year, the largest cryptocurrency might be more inclined to mirror major stock market indices following the launch of several spot Bitcoin ETFs. Hence, a stock market correction is unlikely to bode well for the largest cryptocurrency.
Despite this, BlackRock still sees the largest cryptocurrency as a powerful portfolio diversifier.
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