Goldman Sachs’ resident bitcoin analyst Sheba Jafari issued a cautious note to clients on Monday, warning that the cryptocurrency’s price technicals indicate a bearish move is in the works.
“The market has come close (enough?) to reaching its extended (2.618) target for a 3rd of V-waves from the inception low at 3,134,” said Jafari. “It’s on track to forming a bearish key day reversal if today’s close settles below 2,749.”
Bitcoin has surged around 180% this year so far and hit $3,000 on Monday before plunging 13% to settle at $2,599. That’s well below the technical level of $2,749 that Jafari identified.
The next level to watch closely is $2,475, notes the analyst. “Both daily/weekly oscillators are diverging negatively. All of this to say that the balance of signals are looking broadly heavy.”
Chart: Goldman Sachs (NYSE:GS)
What’s next for the king of cryptocurrencies? If a major pullback does occur, Jafari recommends buying the dip. “Wary of a near-term top ahead of 3,134, consider re-establishing bullish exposure between 2,330 and no lower than 1,915.”
Despite its meteoric rise, some big-name skeptics have come out criticizing BTC as of late. Billionaire Marc Cuban called the cryptocurrency a bubble in a tweet last week, stating “I think it’s in a bubble. I just don’t know when or how much it corrects. When everyone is bragging about how easy they are making $=bubble.”
Cuban also opined that bitcoin is more like gold — a commodity — than a currency. “More religion than asset,” the Dallas Mavericks owner said. “Except of course gold makes nice jewelry.”