A favorable information backdrop is supporting the near-term gains of flagship cryptocurrencies, but ahead of the Bitcoin network upgrade expected in November 2021, rapid growth of digital gold should not be expected. This was stated to ForkLog by Yuri Mazur, head of the data analytics department at CEX.IO Broker.
According to the expert, the inflow of new funds into the market in August stems from unveiling the assets’ internal potential, primarily the successful update of the Ethereum network. The bull-market catalysts also include the upcoming Bitcoin Taproot soft fork and the planned in September launch of smart contracts on the Cardano network.
“The evolution of cryptocurrencies is likely to have a long-term effect and make digital assets more independent from external factors,” Mazur says.
He noted that negatives from regulators and governments have largely been priced into prices:
- China has already taken all possible steps to push out competitors to the digital yuan from the local financial market.
- US authorities are unlikely to follow the Chinese model, aiming to avoid comparison and criticism.
- An attempt by the British regulator to influence the Bitcoin price did not succeed; investors ignored its actions.
“The driver of further Bitcoin growth is likely to be expectations of its network update; however, until a new algorithm is introduced, a strong directional move is not to be expected. Most likely, the price of the first cryptocurrency will remain near the $58,000 level,” Mazur said.
More interesting, in his words, are Ethereum’s near-term prospects. The analyst explained that the ecosystem of the second cryptocurrency has shown versatility and greater adaptability than Bitcoin and other coins.
Any attempt by developers of digital assets to add smart contracts to their networks will go into Ethereum’s piggy bank, in the blockchain where they were first applied, he added.
“Investors are likely to test the resilience of the $4,000 level, and then push the price of the second-largest cryptocurrency above $4,500,” the expert suggested.
Earlier, Delphi Digital researchers concluded that Ethereum’s growth was aided by the derivatives market.
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