What are the 2021 cryptocurrency predictions? At the beginning of each new year, the talk among those interested in the cryptocurrency market revolves around analyzes and expectations of Bitcoin’s performance and the future of cryptocurrencies.

Discussions about digital currencies’ performance and the future of Bitcoin are increasing ​​every year.

Bitcoin gains millions

Let’s say you got into the game when the bitcoin price was 10 cents, around October 2010. If you invested only $ 100 then, you would be able to buy around 1000 Bitcoins. And at the highest level Bitcoin has achieved in recent times, these 1,000 bitcoins were worth more than $ 48 million.

Indeed, ten years is a long time to hold a highly volatile investment, which means that the group of people who invested in bitcoin early and kept it all this long are, in fact, very few.

But as there are many stories of people who have made tremendous gains from the cryptocurrency market, many have lost due to the wrong timing of buying or selling.

Some of those who have held Bitcoin for so long have had trouble cashing in their astonishing earnings due to technical issues – some have forgotten the passwords for their digital wallets, which means they have few attempts to access the funds before it gets locked. Forever.

However, Bitcoin is on a fantastic path that has surpassed all other assets and investments. In 2021 alone, the cryptocurrency is up by more than 63% after quadrupling in value in 2020.

What is driving those heights in Cryptocurrency?

Most recently, the Bitcoin price has been driven by high-ranking support. This year, New York Mellon Bank said it would offer custody services for digital assets, citing increased customer demand.

Earlier this year, Mastercard also announced that it would start providing support for cryptocurrencies on its network this year after customer demand for cryptocurrencies increased.

The most significant event in Bitcoin’s history is the announcement by Tesla Electric Vehicles that it has bought $ 1.5 billion in Bitcoin and will soon accept the cryptocurrency to buy its cars.

Thanks to recent high-level support, some cryptocurrency pioneers predict that Bitcoin will rise to $100,000 or more by the end of 2021, while others argue that it could reach $ 500,000 per coin someday.

Cryptocurrency Forecast 2021

The beginning of the year 2021 witnessed many highs, and the cryptocurrency market achieved the highest waves ever, which led to a series of positive expectations for the year 2021. For example:

Citi Bank analysts expect Bitcoin to be around $ 300,000 at the end of 2021. Although JPMorgan does not provide accurate figures, it confirms that Bitcoin has the potential to grow further, as it competes with gold as an alternative way to store capital and value.

Mike Novogratz (Cryptocurrency Hedge Fund Manager) set $65,000 as a realistic level.

According to Stock-to-Flow (S2F), the Bitcoin price prediction system, BTC / USD, will reach $ 100,000 by December 2021.

Bloomberg analyst Mike McGlone has set a target of $ 50,000 for 2021 and $ 170,000 for 1 Bitcoin in 2022.

And to forecast cryptocurrencies for at least a few months, it is necessary to consider this very volatile market at the moment from two points of view:

  • Analyzing Traders’ Sentiments (Behavioral Economics);
  • From the point of view of analyzing trading volumes in interaction with a price.

The accompanying charts will help us plot this year’s cryptocurrency forecast:

1. Analyze the feelings of traders

Since the start of the pandemic panic in March 2020, the TOTAL index, which considers all cryptocurrencies, has grown by nearly 1000%.

Pay attention to the growth dynamics (5) of the ascending channel lines. From April to December, the index increased at a moderately steady rate, being in the central region. But then a “blowout” happened, and growth accelerated. The indicator has moved to the upper zone, then completely “off-gauge” above the upper line, and has entered an overbought state.

The Google Trends chart also points to the fact that the market is overheating. The world (6) is experiencing similar interest in the growth of Bitcoin, which was last seen in December 2017 (7). People see that BTC has twice crossed the unique peak of $ 20,000 and may have tested the FOMO (fear of missing out) trait inherent in its nature. This effect has long been known; in particular, it is described in Charles Mackay’s The Madness of the Crowd (1841).

2- Analysis of trading volumes

At the beginning of January, the volume was 3.5 times higher than average! But what about the price? It hasn’t changed drastically. Why? The most likely explanation is that cryptocurrencies are pouring widely from the professionals (who haven’t been afraid to buy cryptocurrencies since March) to the mass of newcomers who have rushed to purchase cryptocurrencies under the influence of enthusiasm and emotions.

If so (we tend to believe this based on observations of harsh historical downturns not only from Bitcoin), then the market is peaking, and in the future, a broad-based correction is possible for one of the rising channel lines, followed by a retracement (2, 3 or 4).

That is why, in our opinion, the global plan could be as follows:

End of Winter – Beginning of Spring ← price correction

Then, to bounce back with confidence in the continuation of the uptrend, which has been present widely since Bitcoin’s inception (shown by the blue arrows on the BTC / USD weekly chart on a logarithmic scale).

The 2021 cryptocurrency forecast in this article represents only Finexcrypt analysts’ opinions and should not be construed as an offer, invitation, recommendation, or investment advice.

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