Bitcoin to consolidate at $US8000 a coin: Goldman Sachs

Technical analysis of the unorthodox Bitcoin market has led Goldman Sachs to believe the major cryptocurrency is set to consolidate at $US8000 ($10,500) a coin.

After a month that saw Bitcoin soar beyond $US5000, $US6000 and then $US7000 a coin, technical analysts Sheba Jafari and Jack Abramowitz have warned traders against betting on a near-term boost past $US8000.

Applying the Elliott wave theory, the analysts deduced the crypto-asset is likely to consolidate at this price for a time, as it marks “the third of five waves up”.

“The market has shown evidence of an impulsive rally since breaking above 6044,” said Sheba Jafari, vice-president of the bank’s FICC Market Strats team.

“Next in focus [$]7941. Might consolidate there before continuing higher.”

Elliott wave theory breaks down market movements into predictable pushes, where investors are influenced by mass psychology that shows up in the same repetitive patterns.

An “impulsive wave” is an over-arching, main upwards trend that incorporates five waves, and is then followed by three “corrective waves”, which sees investor behaviour retreat.One set of five impulsive waves followed by three corrective waves completes a cycle.

In the case of Bitcoin, Goldman Sachs believes the asset is currently nearing the peak of its third wave higher.

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Source: Bitcoin to consolidate at $US8000 a coin: Goldman Sachs – The Sydney Morning Herald