Bitcoin Price Prediction, will BTC’s price hit $45580.29?

Bitcoin: An overview

The rationale behind Bitcoin [BTC] sprung from the need for an electronic payment system based on cryptographic proof instead of trust. This transition would allow any two willing parties to transact directly with each other without the need for a trusted third party.

Unlike traditional currencies, Bitcoin is neither issued by a central bank nor backed by any government. Thus, making the king coin independent and away from plausible manipulations from the authorities.

In essence, it’s a virtual currency developed to act as money and a form of payment outside the control of any one person, group, or entity. It is rewarded to blockchain miners for their computing work to verify transactions. 

Bitcoin was brought to the public eye in 2009 by an anonymous developer (or group of developers) using the name ‘Satoshi Nakamoto.’

It has since become the most well-known cryptocurrency in the world. Even so, the coin’s characteristics had set the foundation for the development of many other cryptos. Today, BTC’s benefits are well-regarded in some countries, so much so that they’ve declared it as the official currency.

Bitcoin uses the SHA-256 hashing algorithm to encrypt the data stored in the blocks on the blockchain. Simply put, transaction data stored in a block is encrypted into a 256-bit hexadecimal number. That number contains all of the transaction data and information linked to the blocks before that block.

BTC’s journey

Given the macroeconomic turmoil across the world, a ton of specialists are expecting an aggravated recession. Since mid-June, Bitcoin has rallied near its December 2020 lows.

After its August 2017 launch on Binance, BTC rallied toward the $18.8K-mark in the next three months. Then, the coin failed to initiate momentum above this resistance (now support) until December 2020. The resultant rally propelled BTC to attain its ATH on 10 November. 

Since then, it has marked a consistent decline in value rally as it kept flipping its support levels to resistance over the last 11 months. Owing to a strong correlation with S&P 500 on average, BTC declined alongside most cryptos in the market.

This decline induced a retest of its two-year support in the $18.K zone. Keeping in mind the broader macroeconomic conditions, the sellers could aim to constrict the buying rallies by preventing a trend-altering rally.

Let’s dive deeper into some other developments to gauge its potential to lift off in the coming times.
 

Can BTC find reliable rebounding grounds?

UNDERLYING SENTIMENT

Asset managers showed signs of accumulating shorts. This reading entailed a flattening of net long positions. On the other hand, hedge funds are closing their short positions. These readings hinted that they’re taking profit after BTC’s drop over the last few months.

In either case, the underlying sentiment tilted toward the bears.

EXCHANGE OUTFLOWS AND SOCIAL DOMINANCE

An analysis of the exchange outflow revealed a significant spike, especially in September 2022. Historically, such spikes have been supported by a corresponding increase in the price. But in this case, the price was yet to witness a substantial uptick on its peaks and troughs. Should the price action follow, the buyers could find near-term rebounding grounds at the immediate support level.

To top it up, the Social Dominance for the coin has been on a consistent decline over the last few months. With the broader conditions not favoring risky assets, especially Bitcoin, the king coin has been struggling to stimulate and sustain a strong Social Dominance.

CORRELATION WITH S&P500

The post-Covid era has visibly exhibited a strong correlation between Bitcoin and the S&P 500. Moreover, it has highlighted the highest correlation over the last few weeks.

The wider impact of increased inflation propelling the Federal Reserve to increase the interest rates should be considered by the buyers before taking an immediate long position.