Over the weekend, the price of Bitcoins reached an all-time high. For the first time ever, they broke through the $4,000 mark on Sunday, and continued to rise throughout the whole of Monday, and the beginning of Tuesday morning, before eventually peaking at $4,339.79. Quite a big weekend for Bitcoin.
Although the peak seems to have been halted for now, Goldman Sachs’ believes that Bitcoins really is a cryptocurrency to keep a watch of this coming week, believing that it could rise as high as $4,827 in the short term. They are describing this rise as the currency rising a ‘fifth wave’ of an ‘impulsive’ rally.
In one weekend, the price of Bitcoins actually quadrupled in value for the year; however, it has been warned that because of the five-wave sequence, you should expect the market to enter a corrective phase, which will in turn see a dip in the price of Bitcoins. Experts say that the corrective phase would normally last at least one-third of the time that it took to complete the advance, and should retrace at least 38.2 percent on the entire move, which would therefore take Bitcoins value down to $2,221, based on the current figures shown above. So, although it is likely that some investors would have seen an increase in profit, based on the fifth wave theory, this would not be expected to last.
However; of course, we should not base everything on the prediction of one analysis. Others are in fact predicting that Bitcoin will continue to grow over the next few years, with some analysts predicting that it could climb into the tens of thousands. This would definitely see an increase in profits to investors. The reason for this favourable prediction is that in recent years, Bitcoin popularity has grown considerably, and they believe that it will be this interest combined with a limited circulation of 21 million coins that will naturally drive the prices higher.
Although it is still very early days, the same could not be said for Bitcoin Cash, which was the cryptocurrency that was split off from Bitcoin at the start of this month, which saw a loss in value. Despite it being very new still, there are fears that the value might drop even more, as there has been no mass interest in this currency, seeing it drop 2.20 percent against the dollar. If this does not change, it might result in the value dropping even further, seeing a loss for all of those who have invested.
References and Further Reading:
- Business Insider; Bitcoin hits a record high before rolling over
- CNBC; Goldman Sachs says bitcoin may rise about $500 more, before losing half its value
- Business Insider; GOLDMAN SACHS: Here’s when we’ll know bitcoin’s top is in