Cryptocurrencies have been perhaps the biggest success story of 2020-2021, with monstrous gains being posted since Bitcoin’s local low of $5165 on 13 March last year. Institutional investors’ decision to finally take the crypto plunge saw a rally that made 2017-18 look like a drop in the ocean; prices for BTC and ETH skyrocketed over 1000% in a matter of months to reach dizzying heights this May of $63,538 and $4,179, respectively. Then came the inevitable correction. The major digital currencies lost over 50% of their value in the weeks that followed, prompting many to lose faith in this famously volatile asset class once again.
But make no mistake, this was indeed just a correction, not a crash like the one seen in 2018. As such, the recent declines actually represent an excellent buying opportunity for any hodlers or swing traders out there. In fact, as of this week, it would appear that the tide is already shifting back to growth. Both Ethereum and Bitcoin are up almost 30% in the past week alone as the technicals appear to be announcing a nascent uptrend.
Moreover, virtually all of the moving averages are signalling that most major cryptocurrencies are now a buy. Meanwhile, the RSI has now moved out of oversold territory, which would indicate that the new growth trend is taking hold.
As we switch our focus to the fundamentals now, we can see a number of positive factors liable to drive growth further. First and foremost, we have the much-anticipated Ethereum London hard fork, which is expected to go live on 4 August and forms part of the project’s roadmap towards the POS-based Ethereum 2.0.
The protocol update includes five Ethereum Improvement Proposals (EIPs), of which EIP 1559 and EIP 3554 are the most significant. EIP 1559 intends to make ETH less inflationary through the introduction of a revised fee structure.
EIP 3554, on the other, is meant to gradually increase mining difficulty on the Ethereum network, thus laying the way for the migration to proof-of-stake. The expectation here is that ETH will experience a rapid appreciation in anticipation of a shift in the supply-demand dynamic due to a combination of harder mining and increased investor demand for a less inflationary ETH.
Looking at Bitcoin, we see a similar picture of increased demand against reduced supply, though in this case, the causes are rather different. The reason for the reduced supply in Bitcoin has not been an increase in mining difficulty per se. Instead, it’s a knock-on effect of the Chinese government’s decision to outlaw cryptocurrency mining in the People’s Republic. Since the crackdown last month, Bitcoin mining capacity is estimated to have been slashed by over 35% in the short term. Of course, this will likely recover in the medium term, but it won’t be instantaneous.
In the meantime, demand for the original cryptocurrency is likely only to increase as the new crypto uptrend take holds. While this will be true for most major coins, any trend is typically more strongly expressed in Bitcoin, especially given the huge influx of Wall Street capital into the project over recent weeks and months.
With cryptocurrencies becoming increasingly mainstream, this current dip represents an excellent opportunity to throw your hat in the ring while Bitcoin and Ethereum prices are relatively low. And because Libertex offers both long and short positions in a wide range of digital assets, you can still try to benefit whichever way you think the crypto market is headed. Our generous leverage and CFD-based model mean that you can maximise your potential gains all without worrying about actually owning a given instrument.
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|#||Crypto||Prediction||Accuracy||CVIX||Price||24h||7d||Market Cap||7d price change|
|1||BTC||Bitcoin predictions||86.4%||21||$20 386.05||1.27%||4.08%||$390 814 027 565|
|2||ETH||Ethereum predictions||63.2%||78||$1 376.31||1.87%||2.52%||$168 834 824 310|
|3||USDT||Tether predictions||92.4%||1||$1.000149||-0.01%||0.01%||$68 222 741 977|
|4||BNB||Binance Coin predictions||87.6%||21||$296.13||0.56%||3.97%||$47 777 251 664|
|5||USDC||USD Coin predictions||94%||1||$1.000099||0.02%||0%||$46 439 045 522|
|6||XRP||XRP predictions||60.4%||85||$0.503965||5.75%||13.60%||$25 126 984 915|
|7||BUSD||Binance USD predictions||90.8%||1||$1.000404||0.05%||0.02%||$21 050 734 011|
|8||ADA||Cardano predictions||76.8%||42||$0.435186||0.75%||-0.57%||$14 909 258 504|
|9||SOL||Solana predictions||83.2%||21||$34.39||1.15%||1.69%||$12 216 494 203|
|10||STETH||Lido stETH predictions||94.8%||1||$2 941.39||-0.40%||-3.32%||$10 258 752 564|
|11||DOGE||Dogecoin predictions||83.2%||21||$0.065906||1.48%||8.37%||$8 743 789 050|
|12||MATIC||Polygon predictions||70.8%||56||$0.850028||1.60%||13.44%||$7 424 411 111|
|13||DOT||Polkadot predictions||70.4%||59||$6.50||1.24%||0.60%||$7 298 763 043|
|14||DAI||Dai predictions||94.8%||1||$0.999841||0.04%||0%||$6 788 281 179|
|15||WTRX||Wrapped TRON predictions||92.8%||5||$0.062712||0.65%||4.25%||$6 376 303 888|
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