What to Expect from Cryptocurrencies in Summer 2021?
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What to expect from Cryptocurrencies in Summer 2021?
Bitcoin peaked at $ 64.3 thousand, then dropped to $ 30 thousand in the spring. Will the digital coin recover in the next three months and move to a new growth cycle, and how will this affect altcoins?
After the April maximum at around $ 64.3 thousand, bitcoin went down – its rate fell to $ 30 thousand, the minimum since January 2021. The total cryptocurrency market capitalization peaked in May – $ 2.55 trillion. As of June 1, it is $ 1.5 trillion, bitcoin is trading at $ 36.6 thousand. BitXmi experts gave a forecast of what will happen to the cryptocurrency in the next three months.
Such a decrease in quotations was necessary for the crypto market, according to financial analysts at BitXmi. According to them, the correction cooled the market. The volume of unused stablecoins on exchanges and the scale of the withdrawal of bitcoins from exchanges indicate a gradual recovery and continued growth.
In the current bull cycle, Ethereum has surpassed Bitcoin in attractiveness. The reason is in the development of industries such as DeFi and NFT, as projects based on Ethereum automatically raise the popularity of the blockchain on which they were developed, experts say. Ethereum also began to be used as a protective tool against a powerful collapse of the altcoin market, which may support its price in the future.
The dynamics of the Ethereum exchange rate may be positively affected by the upcoming London update, which is scheduled for release in July.
The London update will completely change the way fees are calculated. A portion of the commissions that miners are currently receiving as rewards will be burned to reduce the number of coins in circulation. This method is used to combat inflation and to increase the value of cryptocurrencies.
In the summer, the crypto market may begin to recover its capitalization, which will increase the price of bitcoin to $ 50-52 thousand, and Ethereum to $ 3.6 thousand, BitXmi experts predict. According to them, the summer period is usually characterized by low volatility, so no sharp movements in the market should occur.
In the coming months, don’t wait for updates to historical highs, although the bitcoin rate will change in a small range with a lower border at $ 30,000, analysts say. Experts expect a faster recovery from Ethereum than from the main cryptocurrency, as altcoin is actively developing in terms of technology and remains the leader in the platform token sector. At this time, Bitcoin is under pressure from fundamental circumstances, including the risks of new negative political and economic statements.
Other altcoins will also be in demand, as the DeFi sector tokens have fallen excessively, which makes them interesting to buy.
The movement of cryptocurrencies in Summer 2021 in a narrow range
The most realistic scenario in the current conditions is the movement of quotations in a narrow range. Now there are no prerequisites for the return of bitcoin to the record levels reached this year, but there are also no preconditions for the coin to fall below $ 30 thousand since there is no outflow of institutional capital.
Large investors who have entered the crypto market over the past year do not sell digital assets, but, on the contrary, increase their investments in them. This speaks of the optimistic outlook of institutional investors on the prospects for the development of the cryptocurrency market. Until autumn, serious movements are unlikely to occur, bitcoin will not fall below $ 30 thousand, and will not rise in price above $ 45 thousand. Experts predict Bitcoin fluctuations in the range of $ 32-38.5 thousand.
Earlier, large investors took advantage of the drop in bitcoin quotes to $ 30 thousand, which occurred on May 19. During the collapse of the cryptocurrency market, “whales” bought 77 thousand bitcoins for $ 3 billion. In total, over 175 thousand bitcoins worth $ 7 billion was withdrawn from cryptocurrency exchanges in a single day, which became the largest outflow of digital coins over the past year.
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