Goldman Sachs are the latest to join the bitcoin price predictions. The bank foresees bitcoin surpassing the current 2019 high to reach New Year high of $13,970. But investors will have to wait until the current pullback is over.
The Wall Street Company released the information on a note sent to investors on Monday. The bank predicted a short term price target of $13,971. The price target set by Goldman predicts a 25% increase in the current bitcoin price if it were to go up. Currently bitcoin is experiencing some pullbacks. It could be the best opportunity for investors looking to join the bandwagon.
Su Zhu of Three Arrows Capital tweeted a portion of the note from Goldman Sachs on Monday. Judging from the information revealed on the tweet, the forecast relies on the Elliot wave theory. The theory holds that there is an observable pattern in price action of assets controlled by herd mentality.
Su Zhu was surprised by Goldman Sach’s bullish target on bitcoin, the fact that they had a target and the fact that used the Elliot wave theory without including the weekend’s price action.
Herd Mentality And Its Effect On Crypto Price Action
The suggested pattern operates between periods of pessimism and optimism- downtrend and uptrend. According to the Goldman’s note, bitcoin may push towards the $12,900 and $13,900 price levels if its price doesn’t fall below $10,790. Bitcoin’s price is currently staggering at $11,100.
Binance research highlighted the effect of herd mentality on crypto price action in a report published in April this year. The document notes that the effect is most noticeable during an early downtrend and late uptrend phases.
The analysis by Goldman however does not take into account the tradings during the weekend since it uses data from the bitcoin futures alone. The predicted upsurge to $13,971 would take bitcoin to a new 2019 high. It also means bitcoin would be less than $6,000 of the all-time high achieved in mid-December 2017.
Surviving The Pullbacks
It is tradition, as noted by Bitcoinist, that the latter half of summer coincides with a downward trend for the popular cryptocurrency. Bitcoin went through the same procedure in July by sliding down to mid $9,000 just after breaking above $13,000 in the second week of July. The same could happen.
A mini-recovery was however reported at the beginning end of July. Last week, bitcoin’s price achieved the highest weekly closeout of the year so far.
As per the Goldman’s Sachs analysis, any pullbacks after reaching the $13,970 is yet another perfect buying opportunity for investors. The road to $20,000 in 2017 underwent the same pullbacks. At least eight pullbacks, 30% each were witnessed before bitcoin went on to reach an all-time high, inches shy of $20,000.
Bitcoin Bull Case Is Still On
The excerpt from the note recommends buyers to capitalize on the opportunity to buy in case of a retracement from $12,900-$13,900. So long as the retracement doesn’t go further than 9084, then we are good to go for a new 2019 high.
Only recently, Tim Draper a billionaire VC investor reiterated on his $250,000 bitcoin price by Q1 of 2023. He also asserted that the flagship cryptocurrency would be a major medium of exchange globally.