Bitcoin has had a blistering start to 2017. It’s up about 180% so far this year. However, its near-term outlook isn’t looking so hot, according to a note released on Monday by Goldman Sachs head of technical strategy Sheba Jafari.
“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,” Jafari wrote. “It’s on track to forming a bearish key day reversal if today’s close settles below 2,749.”
Bitcoin hit a lifetime high of nearly $3,000 a coin on Monday, but was unable to hold onto those gains. The cryptocurrency finished the day at $2,599, well below the key technical threshold of $2,749 that was singled out by Jafari.
Now, traders should be paying close attention to $2,475 on a weekly basis, as a close below there would cause even more damage to the technical picture, according to Jafari. “Both daily/weekly oscillators are diverging negatively. All of this to say that the balance of signals are looking broadly heavy.”
Jafari isn’t alone in calling for at least a near-term top in the cryptocurrency. “I think it’s in a bubble,” tech billionaire Mark Cuban tweeted last Tuesday. “I just don’t know when or how much it corrects. When everyone is bragging about how easy they are making $=bubble.” Cuban did not say how far he thought bitcoin would fall.
So where will bitcoin go from here? “Wary of a near-term top ahead of 3,134, Jafari concludes. “Consider re-establishing bullish exposure between 2,330 and no lower than 1,915.”