Goldman Sachs Side-Eyes Bitcoin Just Long Enough To Perfectly Call The Top

Counterpoint: “Goldman Sachs is exactly what bitcoin is meant to destroy.”
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It was with the air of a Julliard-trained violinist reluctantly bowing the first notes of Devil Went Down To Georgia for a family wedding that Goldman Sachs on Monday initiated coverage of the speculative money-laundering-based asset and digital blackmail vehicle known popularly as bitcoin. “Due to popular demand, it’s worth taking a quick look at Bitcoin here...” Goldman's top technical analyst Sheba Jafari wrote in a note to clients, the ellipses presumably denoting a heavy sigh. Goldman didn't want to do this, but you gotta go where the customers are.

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Jafari’s conclusion: expect a top soon. Here's a chart, courtesy of Zerohedge.

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The specific call: “Wary of a near-term top ahead of 3,134. Consider re-establishing bullish exposure between 2,330 and no lower than 1,915.”

Unsurprisingly, the bitcoin community didn't take too kindly to Goldman wading into their turf. If the Fed is the archfoe of the paranoid cryptolibertarian imagination, Goldman is a close second. “Goldman Sachs is exactly what bitcoin is meant to destroy,” said some Redditor. Added another: “Lol so, Goldman gets high demand for bitcoin research, and then they turn around and say it's overvalued. Ironic? All they did with their deep wisdom is make a ratio and apply it forward. Great work guys. That's a wrap.”

Lo and behold:

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See that top? Just over $3,000 on the same day Goldman issued the note. Three down days later, bitcoin is bouncing around $2,300, the upper bound of the range Jafari spelled out.

Sometimes technical analysts get lucky. Other times they make good calls. This looks like the latter. It makes you wonder about the whole technical analysis thing, which often gets mocked by others in the financial world as basically an occult practice, on the level of tarot cards or Federal Reserve macro forecasting. And not only was the analysis dead-on, it was dead-on about an asset that veteran investors tend to regard as the market equivalent of K2, an asset advertised as a safe alternative to ordinary currencies that in reality exacerbates all their worst and most volatile qualities.

So anyway, kudos to Goldman. We look forward to Jafari's take on Potcoin.

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