Bitcoin could be on the verge of breaking through to $ 42,000, Hodler activity shows

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Chain analyst Willy Woo has claimed that Bitcoin (BTC) will break above the resistance level of $ 42,000 on his next attempts.

The researcher based his bullish analogy on the so-called Rick Astley indicator, a heat map that tracks Rick Astleys investors around the world who buy Bitcoin to hold the asset longer.

The indicator earlier predicted Bitcoin price spikes based on investor buying activity below certain technical resistance levels.

Investor buying and holding habits are tracked using the Bitcoin chain heat map. Source: Willy Woo

However, Woo noted that “authoritarian long-term investors are absorbing” the supply of Bitcoin below $ 42,000, increasing the chances of the cryptocurrency closing above the level.

Bitcoin’s 90-day moving average moving to Rick Astley on the verge of crossing the upside. Source: Willy Woo, Glassnode

“The strong HODLers took this opportunity to pick up large amounts of coins while we are below the resistance ceiling,” Woo tweeted.

The statements came a day after Bitcoin recovered its psychological resistance level of $ 40,000 as support.

BTC held its ground above the bottom price on Friday despite a sentiment of looming profit taking. It set an intraday high of $ 41,191 before correcting lower to $ 40,360 at 12:05 UTC.

Bitcoin’s bullish outlook appeared limited due to its tendency to reject bullish breakout attempts above the $ 40,000- $ 42,000 area. In detail, the BTC / USD exchange rate made at least ten attempts to close above said range after the infamous crypto crash of May 19,

Bitcoin remained below the resistance level of $ 42,000. Source: TradingView.com

But each time, strong selling pressure around the zone pushes BTC / USD rates down towards the $ 30,000- $ 35,000 range.

Compression of the current offer

Woo’s upward predictions also focused on supply squeezing a situation in which the number of available Bitcoin bids falls below demand in the spot market, resulting in higher bids.

Related: This Bullish Bitcoin Options Strategy Targets $ 50,000 With No Liquidation Risk

Woo applied his own “Liquid Supply Shock” indicator to conclude that the markets were running low on Bitcoin.

Bitcoin’s supply shock relative to its price. Source: Willy Woo

In detail, the cash supply shock is the ratio of the coins that traders cannot buy to the coins they can buy. Woo calculates the supply shock by dividing the coins held by authoritarian investors with the coins held by speculative investors.

“Coins are rapidly disappearing from the available market as powerful holders continue to lock them away for long-term investments,” Woo said, adding that the supply squeeze could send Bitcoin to $ 55,000.

“I haven’t seen a supply shock opportunity like this since Q4 2020, when BTC’s price was $ 10,000 to be revalued to $ 60,000 in the months that followed. Our supply shock is still in play with higher prices expected. “

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move comes with risk, you should do your own research before making a decision.

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