Bitcoin’s bearish days may not be over yet, according to the technical analysis team at Goldman Sachs, led by Sheba Jafari. As covered by Investopedia, the technical analysis team recently warned that the flagship cryptocurrency has the potential to drop below its February levels of roughly $5,900.
According to the team’s analysis, the cryptocurrency may see the bears take over once again, as a short-term support at the $9,210 mark has been broken, a note sent to investors explains. Per Jafari’s words, the next meaningful level is from $7,687 to $7,198.
If Bitcoin is to fall below that level, then the probability of it dropping below its February low point increases. Justifying her new level to watch, Jafari pointed to the 200-dma, referring to the bitcoin daily moving average (DMA).
Goldman Sachs’ technical analysts wrote:
“The 200-dma in particular is important given that it held very well at the previous low in September. Getting a close break this time around would warn of structural damage, increasing the risk of new local lows (<5,922). At this point, need to get back through 9,322 (the Feb. 26th low) for this to stabilize.”
Bitcoin surged from little under $1,000 to over $19,200 last year. The flagship cryptocurrency then started plummeting, and hit a $5,900 low by February, before it started to recover from the dip. At press time, one Bitcoin is currently trading at around $9,400 according to data from CryptoCompare.
Notably, the cryptocurrency recently saw its value drop from the $10,000 mark after cryptocurrency exchange Binance had to fend off a large-scale theft attempt, that led many to believe it had been compromised. Moreover, Japan’s Financial Services Agency (FSA) ordered the suspension of two cryptocurrency exchanges.
Goldman Sachs on bitcoin
As reported by Core Media, Goldman Sachs has covered bitcoin in the past. The financial institution at one point even recognized that the cryptocurrency could be viable money in emerging markets. According to the bank, cryptocurrencies offer “viable alternatives in countries and corners of the financial system” where traditional financial services aren’t properly supplied.
Furthermore, Goldman Sachs’ CEO has been somewhat undecided on bitcoin, as he’s been ranging from calling it a bubble, to working out the potential advantages it may bring. Additionally, Goldman-Sachs backed payments startup Circle recently acquired cryptocurrency exchange Poloniex for $400 million, according to reports.