Survived another big test
It's been quite the turnaround in the markets over the last 24 hours as traders quickly morphed from panicking about Russia invading Ukraine to seemingly being more hopeful and buying the dips.
The recovery has been nothing short of remarkable, especially when you consider what is still happening in Ukraine. But as we can see in bitcoin, risk appetite has returned in a big way and the outlook for the crypto is looking far more positive.
The fact that it failed to break the January low during yesterday's panic sell-off is the first thing that really jumps out at me. The level was well defended and potentially signals that a low has formed.
The strength of the rebound is the next thing that is promising for bitcoin. It's already testing $40,000 less than a day after many feared that $30,000 could break.
If $40,000 is broken, then $45,500 looks very vulnerable and a break of this would be a strong signal that there may be good times ahead for bitcoin.
It's been a rough start to the year and with events still unfolding, sentiment could quickly turn negative once more. But we're seeing some momentum building and as long as we don't see another major case of risk-aversion, we could see bitcoin build on that momentum in the coming weeks.
Of course, one other risk is the inflation outlook and recent moves in oil and gas could compound that. But the lows keep getting defended and that could be an encouraging sign.
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