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Volatile Times Ahead for Bitcoin, Goldman Says

July 10, 2017

Sheba Jafari, a vice president in the securities division of Goldman Sachs, predicts Bitcoin could be in for a new set of major highs. The analyst projects that the leading digital currency might make gains to propel it to new record heights, even after it has nearly tripled in price so far in 2017.

Jafari suggested in her report, covered by CNBC, that Bitcoin might rise as high as $3,915 per coin. As of this writing, Bitcoin stands at just over $2,570 per coin. A new record price close to $4,000 would constitute gains of about 50% over the current price. However, Jafari suggested just weeks ago that Bitcoin might be nearing the end of its stratospheric rise. Here are some arguments for each potential path forward.

Signs of a 5th Wave

In her most recent report, Jafari indicated that “the market is in wave [four] of a sequence that started in the late-’10/early-’11 lows.” Jafari continued by indicating that Goldman is “eventually expecting one more leg higher; a 5th wave. From current levels, this has a minimum target that goes out to 3,212 (if equal to the length of wave I). There’s potential to extend as far as 3,915 (if 1.618 times the length of wave I). It just might take time to get there.”

Following this reasoning, Bitcoin may eventually surpass its previous record of $3,025.47 per coin, achieved on June 11, 2017. Since then, Bitcoin has traded in a range of roughly $2,100 to $3,000, although it has not been able to surpass the levels of early last month. Should a 5th wave take effect, as Jafari suggests, it’s possible that the prices could finally climb above that threshold.

Cautioning against this prediction, though, Jafari added that “fourth waves tend to be messy/complex,” indicating that Bitcoin might continue to trade within the current range, and could potentially fall below $1,900 before making a recovery.

June 12th Note Suggested “Near-Term Top”

In a note just after the June 11 record-breaking day for Bitcoin, Jafari suggested that “due to popular demand,” she was “wary of a near-term top ahead of $3,134” for the popular cryptocurrency. She suggested that traders should “consider re-establishing bullish exposure between $2,330 and no lower than $1,915.”

There are a lot of possible price levels and trajectories swirling around in these and other analytic reports about Bitcoin. It seems possible that the currency could soar to new heights or fall precipitously before regaining. However, the fact that Goldman and other big players on Wall Street have been focusing efforts on Bitcoin suggests that cryptocurrencies in general may be poised to break down the barriers that previously separated them from the mainstream financial world.

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