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Bitcoin rose above $40,000 last night as it formed a bullish divergence over the 4-hour period, while exiting the oversold area. This setup is bullish and can lead to a significant rebound. After trading below for some time, Bitcoin closed yesterday within the channel, which has been around 100 days. This is another bullish indicator, as the wick formed indicates buyers entering the channel, causing a fake-out of the pivotal channel.

The macro landscape looks positive to me in terms of bullish technical analyses, which is quite different from the majority. Many are more concerned about a 50-basis rate hike as core PPI was nearly double what they expected, which increases the likelihood of an economy slowing.

But, it doesn’t matter if the 50-basis rate is increased or not. It is what the consumer thinks is important. The University of Michigan consumer sentiment indicator is flat. This means that there are no unanchored inflation expectations. It also indicates that consumers don’t believe inflation will run away. This was not true in the 1970s which caused a recession.

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