Every Time Buffett’s Berkshire Forms a Death Cross, It’s a Bottom

Berkshire Hathaway, the $860 billion conglomerate long synonymous with Warren Buffett’s steady hand, is facing its first major test of investor confidence in decades.

Since Buffett announced his retirement in May, Berkshire’s “Buffett premium,” the trust investors priced into the company’s shares, appears to be fading fast.

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The Buffett Premium Is Breaking — Can Greg Abel Earn Wall Street’s Trust?

Barchart reported that Berkshire Hathaway has formed a Death Cross, when the 50-day moving average drops below the 200-day, for the first time since August. The last time this technical signal appeared, it marked a market bottom.

This time, however, the context is different. Since Buffett’s retirement announcement, the firm has underperformed the S&P 500 by 34%.

Critics argue that the market is simply recalibrating after decades of Buffett’s dominance. Supporters, however, see the drop as a momentary lapse amid a broader tech-led bull run.

Berkshire Hathaway’s Class B shares are now just $3 away from touching a 30 RSI (Relative Strength Index), a rare sign of potential oversold conditions.

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Still, the numbers tell a cautious story. Since May, Berkshire’s shares have risen only about 5%, while the S&P 500, supercharged by AI and tech stocks, has soared more than 35%.

Buffett’s steadfast value-investing philosophy has left the firm sitting on $344 billion in cash, a figure that underlines prudence but also market hesitancy.

“When Berkshire underperforms the S&P while sitting on record levels of cash, history tends to rhyme. Most times that’s happened, the market didn’t stay calm for long,” investor Peter B noted on X.

The Crypto Question: Will Abel Break the Mold?

For crypto investors, the leadership change raises a more speculative question: Could Buffett’s successor, Greg Abel, be more open to Bitcoin?

Buffett, now 95, has long derided the asset class, calling Bitcoin “rat poison squared” and predicting it would “come to a bad ending.” His successor, the 63-year-old Vice Chairman of Non-Insurance Operations, has remained silent on crypto, leaving markets guessing.

“While Buffett was famously negative about the crypto markets, Greg Abel has shown no strong opinion on the asset class,” Juan Pellicer, Head of Research at Sentora, recently told BeInCrypto.

Abel will likely continue Buffett’s legacy, focusing on tangible, cash-generating businesses. Still, Berkshire’s quiet investment in Nu Holdings, a Brazilian digital bank with crypto exposure, suggests the door may not be entirely closed.

While Wall Street’s trust in Greg Abel remains untested, investors debate the end of the “Buffett premium as Berkshire’s technicals flash warning signs.