By Jeff John Roberts
November 7, 2017

Bitcoin smashed through the $7,000 mark last week—and the digital currency’s remarkable run, which has seen its value increase seven-fold so far this year, may not be over.

According to an analysis by Goldman Sachs, the price of bitcoin could reach “at least $7,941” and hover around that point for a while.

The analysis, set out in a Goldman client note, describes an impulse wave pattern, which is a five-stage series of price movements that can be used to measure market activity. The note explains that bitcoin’s passing a high of $4,921 in October “opens up the possibility of being in wave (3).” If bitcoin is indeed in the third part of the wave cycle, here is what might happen next:

This break indicated potential for an impulsive advance, one that could reach at least 7,941. This is the minimum target for a 3rd of 5-waves up and should therefore be a level from which to watch for signs of a consolidation.

The analysis also notes that, under the model, the 4th wave will involve a pullback of around 23.6% (or around $6,747) before the price starts to climb again in the fifth and final part of the wave cycle.

Here’s a screenshot from Goldman Sachs that shows different parts of the impulse wave. The easiest way to read it is to look for the numbers in parenthesis, which correspond to the tops or bottoms of each sequence. For instance the red (2) marks the low of wave 2 while (3) marks the possible top of wave 3.

Goldman Sachs

The “impulse wave pattern” described in the Goldman note is based on a form of analysis known as the Elliot Wave Theory, which holds that market swings can move in predictable patterns based in part on mass psychology.

Goldman Sachs is not the only one applying this kind of analysis to forecast bitcoin price movements. Last month, my colleague Jen Wieczner reported how another analyst detected patterns known as Fibonacci sequences in bitcoin:

In this case, JC Parets, a chartered market technician who is the president and founder of All Star Charts, observed that the price of Bitcoin has moved upward at intervals resembling the Fibonacci sequence, a famous mathematical pattern that also occurs in nature in everything from the inner spiral of a seashell to pinecones…

With Fibonacci, the length of the next segment is equal to the sum of the two preceding segments. In Parets’ chart above, he shows that Bitcoin’s rallies, since the price surpassed its 2013 high, have followed a similar pattern, where each new leg up corresponds to a percentage increase as predicted by the Fibonacci series.

These observations are just theories, of course, (Goldman Sachs says its illustration is not to be taken as investment advice) but they do provide interesting conjecture to explain bitcoin’s dramatic run over the last year. After reaching a new high of around $7,400 this weekend, bitcoin returned to near the $7,000 mark as of Monday evening.

For more background on the price history of bitcoin, check out Fortune’s recent retrospective: “5 Big Bitcoin Crashes: What We Learned.

This is part of Fortune’s new initiative, The Ledger, a trusted news source at the intersection of tech and finance. For more on The Ledger, click here.


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