As the cryptocarnage accelerates and as bitcoin tags $10,000, moments ago Goldman chief's chartist, Sheba Jafari, has released her latest technical outlook on various asset classes, among which bitcoin, and writes that as a result of the recent drubbing, "Bitcoin is nearing interesting levels."
According to Jafari, "the market has pulled back pretty sharply off the ~19,500 highs" a sell-off which qualifies as either:
- a corrective 4th wave in an unfinished 5 of V from September, or alternatively
- a larger degree IV of V from the ultimate low.
Either way, according to Jafari, the move lower should be viewed as corrective/counter-trend.
So from a technical perspective what are the key support lines to look for next? Goldman believes that the next important level to watch in terms of support is an equality target off the highs at 9,978. If truly corrective, this 9,978 level should in theory be the area to watch for signs of a reversal/base.
On the other hand, any drop further than 9,836 (50% from ’15) would call into question the nature of the retracement.
Beyond there, Jafari notes that any overlap with the interim high from Nov. 8th at 7,882 invalidates any potential for this to be a 4th of 5/V. This means that "there are clear downside supports to keep in mind. The first big pivot level being at 9,978."
Goldman's bottom line: "Watch for signs of a base ahead of 9,978. Setup weakens through 9,836. Turn neutral/cautious through 7,882."