CEX.IO company blog | What's next for cryptocurrencies in 2021?

Comments by Yuri Mazur, head of data analysis department at CEX.IO Broker.

I think the growth of the cryptocurrency marketwill continue in 2021.This is favored by the ongoing tension with the coronavirus pandemic and repeated tough quarantine measures in European countries. In addition, the interest of institutional players will contribute to the long-term demand for cryptocurrencies, which should support the market in any scenario.

If the situation in the world in 2021 beginsdevelop according to a favorable scenario - the real effectiveness of at least one of the developed vaccines against COVID-19 will be confirmed and consumer demand will recover at a fairly rapid pace - this may lead to an increase in demand for other asset classes.

But at the same time, investors may haveadditional capital to invest in bitcoin, and in my opinion, their interest in this asset is likely to continue. The large-scale losses suffered by the global financial system during the pandemic will not be forgotten for a long time, and it will be necessary to look for new diversification strategies for the future.

If the global recession drags on, andconsumer demand will remain below target levels for an extended period of time, this may provide additional incentive for the growth of the bitcoin rate. And the growth of the bitcoin rate, in turn, will serve as an impetus for the growth of the entire cryptocurrency market.

Speaking of the technical side of the matter, I wouldnoted the current consolidation of BTC / USD in the region of $ 16,500-19,800, which indicates the stabilization of quotations within these limits. It is worth remembering that corrective movements serve to gain new liquidity to continue moving along the trend - after traders have taken profits.

Also the strength of the trend is the determining factor.in the price dynamics of assets. Therefore, at the end of the current corrective movement, one can count on the continuation of the upward trend in the first quarter of 2021, not forgetting to control investment risks.

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