FxWirePro: Hedge funds for cryptocurrency seek Goldman Sachs’ recourse but investment bank giant calls Bitcoin "Broadly Heavy"

Before we begin with this write-up, let’s just know as to how the price of Bitcoin (or any other cryptocurrencies) seems to have exceeded the price of gold briefly for the first time this week; however, this comparison is completely arbitrary.

Consequently, the hedge funds clients have apparently appealed Goldman Sachs’ chief technician to instigate casing cryptocurrencies, majorly on account of the meager presentation of hedge funds.

To begin with the week, bitcoin prices almost soared record highs to $3,000 (2980 to be precise) but did not sustain the bullish momentum to hold this position and dropped below the $2,759.

Durden stated the fact that Goldman Sachs is bearish on the market indicates bitcoin will likely reach new record highs. He also wrote that the market daily and weekly oscillations are “diverging negatively.”

Hedge funds have been starved of volatility in all other classes of assets, according to Durden.

What if Goldman Sachs invest in bitcoin? It would signal a new level of acceptance for the cryptocurrency for institutional investors. Institutional investors have largely avoided bitcoin.

The largest fund to hold bitcoin is the Pantera Bitcoin Fund, which was a $160 million hedge fund last year.

The HFRI Weighted Composite Index, based on hedge fund indices, only returned 0.46% in May and 3.5% year-to-date. In comparison, the S&P500 total return was 1.16% in May and 9.61% year-to-date, while bitcoin has gained 180% this year.

Goldman Sachs has been aggressively exploring blockchain technology for financial transactions and trade infrastructure.

Goldman sees Bitcoin "Broadly Heavy"

In a report issued at the beginning of this week, Goldman's chief technician, Sheba Jafari, determined that "the balance of signals are looking broadly heavy." Goldman is "wary of a near-term top ahead of 3,134. Consider re-establishing bullish exposure between 2,330 and no lower than 1,915." Put in other terms, it appears that Goldman has taken a bearish view on Bitcoin. The report continued, "the market has come close (enough?) to reaching its extended (2.618) target for a 3rd of V-waves from the inception low at 3,134. It's on track to forming a bearish key day reversal if today's close settles below 2,749."