Altcoin Surge as Bitcoin Approaches $121,000
Leading cryptocurrencies continued their upward trajectory on July 17, despite Bitcoin’s slight pullback of over 1% to $117,000. Ethereum jumped 10% to reach $3,600, while XRP climbed 13% to $3.65. Other major altcoins including Floki, Curve DAO and Fartcoin recorded even more impressive gains exceeding 15%.
This positive momentum is largely driven by growing hopes that the US House of Representatives will vote in favor of the GENIUS Act, a major bill concerning cryptocurrency regulation.
Republicans have voted for its adoption, which is expected to take place on Thursday and be signed by the president as early as Friday. This would mark the first major cryptocurrency legislation to be passed by Congress.
The GENIUS Act notably establishes strict rules for stablecoin issuers in the United States, requiring them to back their tokens with cash reserves and short-term bonds. Investors will also benefit from increased information and regular audits.
Short-term Correction Risks for Cryptocurrencies
Although the crypto market is currently buoyed by increased risk sentiment, with a fear and greed index at 67, investors should remain cautious about a possible short-term trend reversal.
Indeed, assets commonly rise ahead of major events, then decline once these events materialize. Thus, cryptocurrencies have surged significantly before the GENIUS Act vote and could experience profit-taking once the law is passed.
Furthermore, many altcoins have propelled themselves well above their moving averages, which increases correction risks for a return to levels more consistent with their historical trends.
Additionally, numerous sell orders have been placed between $121,000 and $122,000 for BTC. Moreover, as trader Killa points out, leveraged traders have been “chasing BTC’s rise,” contributing to a highly volatile and risky short-term market.
BTC could therefore return to between $116,000 and $118,000 during the weekend. The Volume Profile indicates a strong liquidity zone between $118,700 and $116,500.
While the cryptocurrency market currently displays strong bullish momentum, investors should remain alert to early signs of a potential short-term trend reversal. Exercising appropriate caution is essential to best anticipate upcoming fluctuations.
