Cryptocurrency prices had a strong performance this week as the fear and greed index drifted upwards. This recovery happened as companies like Blackrock, Deutsche Bank, and Invesco filed for Bitcoin ETFs with the SEC. These news events helped to ameliorate the recent regulatory challenges in the crypto industry.
Why the $31,091 level matters
The recent crypto news on ETFs was an important one for Bitcoin since the funds will primarily be related to BTC and not other altcoins. Still, other coins like Bitcoin SV, Cardano, and Gala jumped because of the important correlation that exists in the crypto industry.
Now, there are signs that the recent momentum is fading since Bitcoin is loitering at the important resistance level at $30,000. Other altcoins are also moving sideways. Therefore, there are two main reasons why $31,091 is an important level for Bitcoin and other altcoin prices.
First, the $31,091 is the highest level that Bitcoin has been this year. Therefore, if the price manages to move above this level, it will send signals that there are more buyers left in the market. These buyers, it seems like they are willing to buy above the YTD high.
Second, the chart below shows that this price is where the Bitcoin price will form a double top pattern whose neckline is at $24,767. In price action analysis, a double-top pattern is one of the best-known signs of a bearish reversal. If the double-top thesis works out fine, it means that Bitcoin price could drop to about $19,602, which is about 34% below the current level.
Therefore, moving above this level will invalidate the bearish view and confirm that there are still more buyers left. As such, it will mean that the coin will jump to the next psychological level of $35,000. It will signal that the recent rally was not a bull trap or a dead cat bounce.
Implications on altcoins
Therefore, altcoin investors are waiting to see if Bitcoin price willl jump above this price in a high-volume environment. As we have seen this week, altcoins always have a positive correlation with Bitcoin.
By rising above $30,000 this week, other altcoins like Cardano, Solana, and Bitcoin SV also jumped sharply. Therefore, if Bitcoin price jumps to $35,000, there is a likelihood that other altcoins will jump as well.
The alternative scenario is also possible since some analysts believe that the recent rally was a bull trap. As such, if Bitcoin drops, prepare for a major sell-off in the coming weeks. This means that crypto holders should start taking profits and reducing their exposure until Bitcoin price rises abovev $31,091.
Read More: Bitcoin SV, Cardano, Litecoin, Gala Prices Bull Run Waits For $31,091