New horizons for cryptocurrencies

The crypto market appeared to be in a state of mild excitement when Bitcoin surpassed $50K for the first time since May 15th. It is hard to say how sustainable this level may be, as the bulls’ strength has now clearly gone into decline. Nevertheless, the very fact that the benchmark cryptocurrency can overcome such an important technical and psychological level is good support for a positive assessment of the prospects of the crypto market.

Bitcoin has been supported by a number of factors, including the active phase of accumulation of the asset, as well as the equally active phase of withdrawal of the coin from cryptocurrency exchanges’ balance sheets. This is a clear sign of investors’ desire to move into the phase of holding the asset in anticipation of growth. In addition, the active growth of the Bitcoin network hash rate, which crypto market participants often associate with the change of the asset’s price, may also have an impact.

Over the last 5 weeks, Bitcoin has been closing in the green zone, which also acts as a strong factor of support from the market analysis. Amid the financial success of one of the leading crypto exchanges, Coinbase, the company announced its intention to buy $500 million worth of cryptocurrencies. In addition, PayPal announced that from today, UK residents would have access to the platform’s crypto services.

Against this backdrop, the Crypto Fear & Greed Index of Bitcoin and major cryptocurrencies switched to “extreme greed” mode yesterday. The higher it is, the closer the sell-off is. Nevertheless, with the traditional market bubble becoming increasingly inflated, it is safe to assume that bullish sentiment may well be sustained even amid an extremely overheated market.

The total capitalization of the crypto market continues to grow and is moving toward $2.2 trillion. Bitcoin is the undisputed crypto market leader, and with a few exceptions, it sets the tone for all altcoins. According to analyst firm Chainalysis, global acceptance of cryptocurrencies has jumped almost 900% over the past year.

Unexpected data also came about Afghanistan, which Chainalysis ranked 20th out of 154 in the context of cryptocurrency adoption. Last year, the company did not include the country in this ranking at all. Thus, as represented by this country, it is quite possible to assume that by the end of 2021, the crypto market in general and Bitcoin, in particular, have the potential for large-scale market penetration in developing countries with new price horizons for major cryptocurrencies.

The FxPro Analyst Team