Goldman Sees Bitcoin Soaring As High As $3,915 During Next Breakout

Last week former Fortress principal Michael Novogratz made headlines in the cryptocurrency world when he told attendees at the CB Insights Future of Fintech conference that he has cut holdings (in Bitcoin and Ethereum) after the cryptocurrencies' latest "spectacular run," warning that "Euthereum had likely hit its highs for the year," and "cryptocurrencies were likely the biggest bubble of his lifetime."

His caution was understandable: after all during a 2013 UBS conference, Novogratz said "put a little money in Bitcoin...Come back in a few years and it’s going to be worth a lot." We doubt even he knew how right he would end up being.

However, while his latest sentiment appears rather downbeat, Novogratz said he remained very "positively constructive" on the space overall, as he should: he still has 10% of his net worth invested in the sector. And, as Bloomberg reported, Novogratz says cryptocurrencies "could be worth north of $5 trillion in five years - if the industry can come out of the shadows."

So fast forward to Sunday evening Goldman's chief technician, Sheba Jafari, issued only his second forecast of where bitcoin is headed next which may accelerate Novogratz' crypto price target.

Recall, that as we first reported three weeks ago, Jafari said that "due to popular demand, it’s worth taking a quick look at Bitcoin here" and warned that "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." She concluded that she was "wary of a near-term top ahead of 3,134" and urged clients to "consider re-establishing bullish exposure between 2,330 and no lower than 1,915."

She was right: on the very day his note came out, both bitcoin and ethereum hit their all time highs and shortly after suffered their biggest drop in over two years.

So what does Jafari thinks will happen next? According to the Goldman technician, Bitcoin is now "in wave IV of a sequence that started at the late-’10/early-’11 lows. Wave III came close enough to reaching its 2.618 extended target at 3,135. Wave IV has already retraced between 23.6% and 38.2% of the move since Jan. ‘15 to 2,330/ 1,915."

What does this mean for the uninitiated? In short, while bitcoin remains in Wave IV, it could go up... or down. She explains:

It’s worth keeping in mind that fourth waves tend to be messy/complex. This means that it could remain sideways/overlapping for a little while longer. At this point, it’s important to look for either an ABC pattern or a more triangular ABCDE. The former would target somewhere close to 1,856; providing a much cleaner setup from which to consider getting back into the uptrend. The latter would hold within a 2,076/3,000 range for an extended period of time.

However, at that point the next major breakout higher would take place, one which would take bitcoin as high as $3,915.

Either way, eventually expecting one more leg higher; a 5th wave. From current levels, [Bitcoin] 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.

Goldman's analyst concludes with the following summary: "[Bitcoin] could consolidate sideways for a while longer. Shouldn’t go much further than 1,857. Eventually targeting at least 3,212."

Here we can only adds that fans of bitcoin should probably hope that his is not one of those Goldman trade recos where the firm's prop trading desk is on the other side of the clients' trade...

Comments

nope-1004 Kaiser Sousa Mon, 07/03/2017 - 13:18 Permalink

Goldman on board with the anit-USD option? Ok, I'll believe them.... lol.The setup is pretty obvious.  Looks as if the bitcoin shearing is coming soon.  Like Goldman would EVER give the public the straight goods, especially about something that essentially puts all big banks out of the consumer business.  With online shopping growing ever bigger, point-of-sale terminals and paying with a CC online will fade away if bitcoin assumes the role.  And Goldman is ok with it?  Hmmmmm.....Going to be painful.  

In reply to by Kaiser Sousa

Conax nope-1004 Mon, 07/03/2017 - 14:17 Permalink

Now that they have started cheerleading for BTC I am more certain than ever that they intend to use it to siphon off demand for PMs.  They really are in a bind. The stockpile of silver is gone, the gold ransacked yet the OI in both is astronomical, even with the severe beatings.They might leave it alone until they have gathered the last of the muppets' gold for China, then they will come for the BTC. These bastards are good.

In reply to by nope-1004

Give Me Some Truth Raffie Mon, 07/03/2017 - 13:32 Permalink

Silver is down 3 percent. The only possible relative/pertinent news I see is that one of the largest states in the U.S. is about to declare bankruptcy. How in the world is this news spun as anti-gold and anti- silver?I also see that the dollar index is up a little, but does this explain a giant smash-down in gold and silver? Heck, the dollar index was crashing for the last week or so and gold and silver did not exactly soar on this "news." In fact, when the dollar was going down gold and silver were just treading water. You know, I think these markets might be rigged. Is it possible that the riggers get a perverse/psychotic thrill out of knocking down prices when conventional wisdom says these prices should be rising? it is also possible such a counter-intuitive "phenomena" could serve the purpose of further demoralizing any remaining "gold bugs?" Demoralizing all (22 or 23?) gold bugs might just be the goal here. That and keeping 320 million non-gold bugs from becoming gold bugs in the first place. 

In reply to by Raffie

tmosley Give Me Some Truth Mon, 07/03/2017 - 13:45 Permalink

Nobody cares about demoralizing goldbugs. They recognized that they failed to contain gold during the last monetary crisis, so they are controlling it this time. The pressure is finding its way into cryptos rather than trying to fight their system of control.Cryptos seem predestined to take control of the monetary world in any event, given that they are simply fundamentally better than fiat, and are in at least several ways better than gold and silver (certainly much easier to get exact change for purchases). The self-destruction of fiat currencies is certainly speeding the process, however.If central bankers still exist in twenty years, they will think the cause of the collapse of their system was caused by their failure to stamp out crypto. They will never understand that the pressure had to go somewhere.

In reply to by Give Me Some Truth

NEKO AustrianJim Mon, 07/03/2017 - 13:04 Permalink

Short term market is volatile. Slightly longer term its going to explode. Bitcoin is, and will remain, number one with its fixed issuence of 21 million coins max. But as Bitcoin heads to the moon its going to take others with it. Many coins will follow, but some shit coins will crash and burn. Strongest of the coins that will go up with Bitcoin include Ethereum, Litecoin, Dash, and others. At this point, there is still a chance to get onboard. Wait a bit longer and it may be too late. When Bitcoin takes off the rise will be rapid and suprise many, and then it may be too late as the price will seem ever more beyond reach.The cryptocurrencies are proven, and here to stay. Talk of bubbles, no value, and tulips is just wishful thinking from those who have not studied the reason this technology is sound, and will be adopted by governments and all the major financial players in the very near future. It is going to radically change and alter forever the current financial system.In short, you aint seen nothing yet, get on board while you can. A gold rush is happening right now.I kid you not!

In reply to by AustrianJim

tmosley Herd Redirecti… Mon, 07/03/2017 - 14:24 Permalink

>But when will I need BTC to use the internet?You don't need BTC or any other crypto to use the internet. Those coins are just money that is native to the internet--they work very well there.>And how do I know the current price is a fair one? How does one calculate that?The price is set by the market. I think you are actually asking whether the price will go up or down. I have my own thoughts on that subject, but no-one can really know for sure. If adoption continues smoothly, and the kinks continue to be worked out, it will certainly have much more purchasing power per unit in the future than it does now.>And will I be accused of financing terrorists, money laundering, etc?No.>At what point does Quantum Computing pose a threat to cryptocurrencies?When it manifests. Coins will very quickly adopt quantum resistant cryptography (many groups are already working on this--it is very important as most cryptos use the same encryption that protects the banking system and most of the world's nuclear weapons). I wouldn't worry about it.

In reply to by Herd Redirecti…

NEKO Herd Redirecti… Mon, 07/03/2017 - 13:54 Permalink

If you have full and complete (in God we trust) confidence in the US dollar, then just keep you US dollars. No problem. I don't, and BTC is one way to avoid the shrinking value of that "asset". The value of Bitcoin comes from the money put into it, divided by the number of "coins". Currently $42 billion divided by 16.4 million coins issued, giving a value now of $2564 - these numbers are for Bitcoin alone. Now either there are an awful lot of cashed up idiots out there or there is a genuine push to place money in cryptocurrencies. I think its the latter and that this will continue and rise. So the thing will continue to rise in value.If you think this is a bubble, then of course it can collapse. I am not of that opinion, and who is right... well, only time will tell.Gold and silver appear to be moving sideways, and must be a dissappointment to some. And if one day soon the PMs explode,  it wont be easy to sell a one ounce gold coin if its value ever does reach $10,000. Bitcoin on the other hand, may well reach $10,000 this year and can be divided down to 0.00000001 of a coin, a much easier proposition to spend, making it a bit more liquid when times get tough. But in the ultimate nuclear winter, I do agree Bitcoin won't be any use whatsoever at all. But personally I dont think thats where we're going.Let's talk again in six months :-)Cheers. 

In reply to by Herd Redirecti…

uglyclown NEKO Tue, 07/04/2017 - 04:33 Permalink

ya think?The site named Coincap.io currently lists 529 different coins (Alt coins). It is pretty easy to set up a crypto money system. The success of Bitcoin (BTC) has affected Alt-Coin values dramatically. If I hold, for example, Litecoin or Dogecoin in my data wallet and I want to buy something that is priced in BTC or ETH I have to visit my exchange and (assuming I dont want to use cash) sell some Litecoin and buy BTC with the proceeds then, I can do my transaction with the retailer. Clumsy?...of course. We are not very far from the time when every world-class retailer will have their own branded crypto-money. A conversion system that allows customers to submit any Alt-Coin for products priced in – for example – AMZNCoin would expedite purchases for the retailer and be very convenient for the shopper. Converting on-the-fly at the transaction level makes it easy for the consumer and gets the business done. The Converter buys Alt-Coins from the purchaser and pays the retailer with AMZNCoin from their own inventory. The merchandise gets sold and everybody is happy, including the flat-fee Converter. A good example of branded-crypto is POTCoin.com (they sponsored Dennis Rodman’s N.Korea jaunt) that is organized to complete online purchases of legalised cannabis. Currently valued at about 11 cents it will offer large scale growers and (legitimate) resellers of the drug a convenient transaction vehicle for that industry. If it does become a lot easier to make Any Coin transactions with a retailer at the transaction level (without clumsy conversions) then the BTC arena will begin to approach a state of interoperability where any crypto owner can use any coin (at the transaction level) with any retailer and not be restricted to using specific crypto-money to buy their stuff. If all coins can accomplish the same thing then the only things to differentiate one’s choice of coin would be ...cost (lowest out of pocket), risk (price stability preference) and speed (fastest transaction confirmations). In that situation why would anyone choose a transaction vehicle that costs $3,000 and be exposed to high volatility on an overnight basis? With full convertibility and interoperability why not just operate with a somebody’s 30 cent coin? This is called commoditization and when it begins, BTC and all the other expensive coins will be unable to maintain the rareified poisitions they now occupy. The mistake made by those predicting future values as high $62,000 for BTC! is... they have failed to understand that ...things change, their vision has made no allowances for that variable. In the end BTC is simply a crypto transaction medium ...mechanically, it is pretty much like all the others but I think it’s current supra-elevated status will eventually, be viewed as it’s moment of Warholian notoriety. ...Man walks out of a house of ill-repute shaking his head in disbelief...”wow that is one helluva business. You got it.. ya sell it and ya still got it!”  ...all I would add to that is yeah but, with a widely available commodity, there is always a limit as to how much the market will pay for it.

In reply to by NEKO

NEKO uglyclown Tue, 07/04/2017 - 06:45 Permalink

 uglyclown agree with your response and it does give food for thought. Right now crypto conversions are done with reference to Bitcoin, and that does give it a special status. For those not up to date with this, Bitcoin is used as the refernce not the USD. So Bitcoin holds a special place and elevated value in all this and that probably won't change for some time. Ethereum was billed to eclipse Bitcoin this year but that now seems unlikely. Many of the current crypto currencies are here to stay and if you buy and hold Bitcoin you won't go far wrong. In my opinion :-) let's see...

In reply to by uglyclown

Turin Turambar Mon, 07/03/2017 - 12:42 Permalink

Wel, GS has indirectly confirmed it.  IMO, they have been involved in the recent crypto smackdowns.  Now that they've figured out a mechanism for somewhat controlling them (probably via direct trading volume), it's time to fleece muppets in yet another financial arena.  :-(  Basically,   I'm all out of crypto's based upon this news.  All I need now for a double secret contra-confirmation is Gartman coming out and going long cryptos.  LOL