Keep Your Eye on Bitcoin: A Drop Predicted Followed by Record Highs
Bitcoin has had an interesting ride so far this year. The cryptocurrency started around $1,000 a coin, peaking at $3,000, and finishing June near $2,500 (that's a gain of 168%!!!).
This has Wall Street talking. Jeffrey Kleintop, chief global investment strategist at Charles Schwab, suggested bitcoin was in a bubble unlike any we had ever seen before. (An economic bubble is trade in an asset at a price that strongly exceeds the asset's intrinsic value.). This means people are making money! The concern, as tech billionaire Mark Cuban stated in a recent tweet, "I think it's in a bubble. I just don't know when or how much it corrects."
Wall Street appears to agree that the bubble will indeed burst, causing a drop in prices, but will correct and eventually head higher. Sheba Jafari, the head of technical strategy at Goldman Sachs, wrote that bitcoin was "still in a corrective 4th wave" that "shouldn't go much further than $1,857" (a 25% drop). But according to Jafari, there will likely be a 5th wave that will take the cryptocurrency to a record high.
"From current level, this has a minimum target that goes out to $3,212. There's potential to extend as far as $3,915. It just might take time to get there."