Bitcoin is experiencing a monster rally. It has gained more than 15% since Friday's close, topping $4,000, $4,100, and $4,200 for the first time before putting in a high of $4,216 a coin on Monday morning.
But that's only part of bitcoin's recent success. The cryptocurrency has seen huge gains since the August 1 fork that split it in two. Since bottoming at $2,643 a coin the day of the split, bitcoin has exploded by 57%, and it is now up 335% in 2017.
Sheba Jafari, the head of technical strategy at Goldman Sachs, wrote in a note sent to clients on Sunday that because bitcoin was approaching her target of $3,691 (which it has since passed), an extension wave five of this move could take bitcoin all the way up $4,827 before a correction pushes it all the way down to about $2,221.
Jafari isn't the only one who sees bitcoin approaching the $5,000 level. Arthur Hayes, the CEO of BitMEX, a bitcoin derivative exchange, expressed that view to Business Insider after last week's implementation of Segregated Witness, or SegWit, a software update designed to improve the coin's scalability and make it faster to process more transactions. "With Segwit implemented, I believe $5,000 bitcoin is within striking distance," he said.
Bitcoin enthusiasts, however, shouldn't get too excited about the big move up. Jafari warns that the gains are unlikely to last. She sees a drop of as much as 38.2% once the fifth wave is completed. That would mean a move back below $3,000.
"At this point, Bitcoin would have to move back under 2,935 (Jul. 21st high/top of wave 1/V) to signal that a top is already in place," Jafari wrote.