Bitcoin has tanked 23% over the week to the critical $34k support level. This is a key pivot point for the bulls. The main reason for such a large-scale correction is news that Russia launched a military operation in Ukraine.
This action triggered a powerful downtrend in the entire cryptocurrency market. However, at the moment there is still a chance we could see a rebound.
Investors can expect Bitcoin to continue its recovery in the short term and break out of the $40k resistance level. Since the pullback coincided with a massive surge in trading volumes, this could mean that buyers are setting up long positions.
That said, it should also be noted that the key benchmark of the cryptocurrency industry has lost its status as a safe haven asset, decoupling from traditional investment assets during the recent global turmoil. Furthermore, the market for risk assets is coming under pressure from the imminent approach of Fed rate hikes, which in the medium and long term could exert a negative impact on the upside potential of Bitcoin.
Heading into the weekend, we can expect BTC to extend its recovery as it approaches the key $40k resistance level.