Yuri Mazur, Head of Data Analysis at CEX. IO Broker, commented on why cryptocurrency is so noticeable has been rising in value in recent months.
The reasons for the rise in the price of bitcoin are quite obvious - it is the strength of the uptrend and the pandemic COVID-19.Trend is the main driving force in financial markets and most determinesIn turn, the pandemic has already led to a record decline in U.S. GDP in the second quarter, and due to its second wave has already imposed repeated restrictions in continental Europe and Great Britain.The restrictions primarily affected the activities of service businesses in many European countries.Some restrictions also continue in the United States, where college and school tuition continues remotely and the continued work of cultural and entertainment institutions in some regions is at risk.
U.S. stock market despite all expectations of second economic aid package fromThe Federal Reserve, for the third month of stagnation, which eloquently showsabout the fears of investors and banks, the relative recovery of the American economy.I'm under a lot of pressure from the Federal Reserve during the first wave of the pandemic.The second such maneuverinal weaken the position of the U.S. dollar.
As for the factors that negatively affect bitcoin, they lie primarilySpecifically, it's high energy consumption and low transaction processing speed - about 3-5 transactions per second.The second is the main obstacle to scaling the bitcoin network.
But in the current economic and epidemiological conditions, bitcoin has nevertheless acquired the status of a new protective asset that allowsto retain capital when many classic markets and assets are in danger of collapsing.Since only an effective vaccine produced on an industrial scale can be a radical solution to the coronavirus situation, there is ahigh risk of a full-blown epidemic until early next spring.Such a scenario will contribute to the growth of the value of bitcoin, so there is a chance that by the end of this year its price mayto cross the $20,000 mark.
However, there is a high probability of a correction to the level of 16,400 dollars, as the current upward wave has been going on for exactly two months and during this time the growththe value of bitcoin at its peak has reached about 88% since its inception.With this development, the corrective movement is inevitable, and the current stagnation in the range of 17,600 - 18,800 dollars createsAll conditions for a full correction.This scenario seems to me the most likely, so I tend to assume that by the end of 2020 the value of bitcoin will reach$19,000 to $20,000.
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