The market outlook for the two major cryptocurrencies did not seem favourable as the prices of both Bitcoin and Ethereum continues to drop. Today (21st January) BTC recorded a price drop of nearly 8% and ETH recorded a price drop of nearly 9%. With these market speculations crypto market analysts have deduced several predictions on the future market outlook for these two crypto giants.
Would Bitcoin drop to $20,000?
Even though at the beginning of the year bitcoin recorded an all-time high of $34,481 which is a rise in value by nearly 10 times since March 2020, the bullish outlook for the bitcoins has faded away and now replaced with a bearish market outlook.
Oanda Senior Market Analyst Edward Moya has stated to Forbes that, “…right now many cryptocurrency traders are diversifying into other coins in fear that bitcoin could see another collapse if $41,500 is not reached sometime soon.”
This bearish trend of the bitcoin is further stimulated by the recent regulatory pressure that was being directed at cryptocurrencies. New Treasury Secretary, Janet Yellen has raised concerns on utilizing cryptocurrencies for “tech terrorist financing,” and has requested from the US congress for increased regulation in this regard. Adding further insight to the trend of bitcoin, Chief Operating Officer at Coinsquare, Eric Richmond had said that “I predict that there will be swings in the market and the price may come back down to the $20,000 range or under, but the overall trend line for the year will be positive.” Even though certain market analysts suggest that bitcoin would reach the value of $100,000 by the end of this year.
Can Ethereum hit $9,000 anytime soon?
Despite the slight drop in price of Ethereum, analysts predict the future market to be bullish for Ethereum. The rise in the market value of Decentralized Finance (DeFi), where its value reached more than $24 billion, made the Ethereum blockchain much stronger. Due to this, transactions processed by Ethereum was 28% more than that of Bitcoin (showed in a report by Messari).
According to Forbes, Chief Operating Officer of MyEtherWallet, Brian Norton has stated that, “Ethereum has over five times the number of active developers as bitcoin, and is adding developers at a faster clip every day,” higher number of developers would result in a stimulation of demand for Ether tokens as the developer activity improves.
Considering the future market outlook of Ethereum, investor confidence can be build-up on it with the novel blockchain initiative of Ethereum. According to InvestorPlace, James Todaro, Blocktown Capital managing partner has predicted a target of $9,000 for Ethereum at the bullish market. But, this same viewpoint is not shared by all market analysts, according to Capital.com, BI senior commodity strategist for Bloomberg Intelligence, Mike McGlone, predicts that Ethereum would trade in the range of $500-$700 during 2021. It can be said that the overall market outlook for Ethereum is positive and considering favorable investor response a possibility is there to reach $10,500 for ETH.
Ethereum price fluctuations over the previous years
Conclusion
Market of cryptocurrency is one of the most volatile financial markets in operation and it is a known fact that these predictions can either turn out to be correct or might not appear to take place, hence everything depends on the events that impact the cryptocurrency market and the market reaction to those. Therefore, based on the expert opinion possibilities are there for bitcoin to fall to $20,000 and ETH to hit $9,000.
