Bitcoin: Transaction trend analysis
A brief overview of the market
The price of Bitcoin has more than doubled, in early January 2021 the price was 29 thousand dollars, and at the end of April the price of bitcoin has already reached 62 thousand dollars.
Already in February this year, the capitalization of the asset exceeded 1 trillion dollars, which is 10% of the capitalization of gold worldwide.
Since the beginning of 2021, the capitalization of Bitcoin has doubled, which can not cause admiration. But that's not the limit, as some commentators, such as Andy Edstrom, author of the bestseller book "Why buy Bitcoin", predict that bitcoin will reach $ 8 trillion in capitalization in 2030.
As of March 2021, the capitalization of the entire crypto market reaches 1.71 trillion dollars. That is, the capitalization of bitcoin is 59% of the capitalization of all cryptocurrencies in the market.
Factors affecting the market today
Here I would like to divide into two categories, internal and external factors.
Among the internal factors that currently determine the market are the complexity of mining and the number of transactions per day. As you know, in May 2020, bitcoin was halved, and the fee for its extraction was halved to $ 6.25, which was a prerequisite for this year's growth (decrease in remuneration = increase in the value of bitcoin).
As can be seen from the chart, the number of transactions is not falling, which may indicate a positive expectation of market participants.
External factors include the state of the world economy and other markets, such as currency and stock. Recently, the Fed chairman said that federal rates would be in the range of 0.00-0.25% at least until 2023. This means that the crypto market will be even more attractive to financiers on Wall Street.
Possible market scenarios
Consider three scenarios of market development, based on the factor of the number of transactions per day.
The first scenario involves reducing the number of bitcoin transactions per day. As a result, the price trend may begin to decline (this is what we saw after the peak of bitcoin in 2017).
The second scenario is fluctuations in the number of transactions in today's range, as a result the price may fluctuate as in March 2021 (in the range of 50 - 60 thousand dollars), otherwise the price may resume growth and overcome the psychological barrier of 100 thousand dollars.
The third scenario will occur when the number of transactions increases, and here the impact on the price is also ambiguous, because the price can fluctuate within one range (as now), or resume growth and break the limit of 65 thousand dollars for bitcoin.
Conclusions
In the first months of 2021, bitcoin has doubled, and the number of transactions is not declining, which may indicate that participants expect long-term asset growth, and do not see in today's price the limit of bitcoin growth.
The price of Bitcoin has more than doubled, in early January 2021 the price was 29 thousand dollars, and at the end of April the price of bitcoin has already reached 62 thousand dollars.
Already in February this year, the capitalization of the asset exceeded 1 trillion dollars, which is 10% of the capitalization of gold worldwide.
Since the beginning of 2021, the capitalization of Bitcoin has doubled, which can not cause admiration. But that's not the limit, as some commentators, such as Andy Edstrom, author of the bestseller book "Why buy Bitcoin", predict that bitcoin will reach $ 8 trillion in capitalization in 2030.
As of March 2021, the capitalization of the entire crypto market reaches 1.71 trillion dollars. That is, the capitalization of bitcoin is 59% of the capitalization of all cryptocurrencies in the market.
Factors affecting the market today
Here I would like to divide into two categories, internal and external factors.
Among the internal factors that currently determine the market are the complexity of mining and the number of transactions per day. As you know, in May 2020, bitcoin was halved, and the fee for its extraction was halved to $ 6.25, which was a prerequisite for this year's growth (decrease in remuneration = increase in the value of bitcoin).
As can be seen from the chart, the number of transactions is not falling, which may indicate a positive expectation of market participants.
External factors include the state of the world economy and other markets, such as currency and stock. Recently, the Fed chairman said that federal rates would be in the range of 0.00-0.25% at least until 2023. This means that the crypto market will be even more attractive to financiers on Wall Street.
Possible market scenarios
Consider three scenarios of market development, based on the factor of the number of transactions per day.
The first scenario involves reducing the number of bitcoin transactions per day. As a result, the price trend may begin to decline (this is what we saw after the peak of bitcoin in 2017).
The second scenario is fluctuations in the number of transactions in today's range, as a result the price may fluctuate as in March 2021 (in the range of 50 - 60 thousand dollars), otherwise the price may resume growth and overcome the psychological barrier of 100 thousand dollars.
The third scenario will occur when the number of transactions increases, and here the impact on the price is also ambiguous, because the price can fluctuate within one range (as now), or resume growth and break the limit of 65 thousand dollars for bitcoin.
Conclusions
In the first months of 2021, bitcoin has doubled, and the number of transactions is not declining, which may indicate that participants expect long-term asset growth, and do not see in today's price the limit of bitcoin growth.
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