- Bitcoin has recovered in a V-shaped move over the past 48 hours
- Bitcoin is now trading at a key resistance level around $38,165
- If the $38,165 level is broken, $40,000 per BTC is possible within the next 24 hours
Bitcoin (BTC/USD) is staging a recovery after forming a V-shaped rebound from $32,800 on January 24, 2022. Buying volumes have increased as Bitcoin stabilizes while markets weigh the prospect of U.S. interest rate hikes — a major factor behind its recent decline.
Bitcoin’s recovery explained
Bitcoin is the first decentralized digital currency that allows people to transfer value without relying on third-party intermediaries like banks or credit card companies. Think of it as electronic cash: you can send Bitcoin from one person’s wallet (a mobile app or online account) directly to another’s address if you know it.
Over the past year, Bitcoin has attracted significant institutional interest, which helped drive its earlier rise to about $69,000. In addition to hedge funds and other institutional investors, some public companies have added Bitcoin to their balance sheets. Notable examples include Tesla and MicroStrategy.
Ark Invest’s Cathie Wood has suggested that if all S&P 500 companies allocated just 5% of their cash to Bitcoin, BTC could be worth more than $500,000 within ten years.
That said, Bitcoin remains highly volatile in the short term. It recently moved away from a critical support zone, and investors feared that if BTC had continued lower and broken $30,000, it might have fallen well below $20,000.
Bitcoin price outlook
Source: TradingView
Over the past 24 hours Bitcoin has traded higher and cleared the 38.2% Fibonacci resistance at $36,989.61. It is currently testing the 50% Fibonacci resistance at $38,165.27, but has not yet broken through.
If Bitcoin manages to surpass $38,165.27, it could test $40,000 within the next 24–48 hours. Conversely, failure to hold above $38,165.27 would likely open the path back toward sub-$35,000 levels.