hodler activity indicates that Bitcoin may be about to break through $42,000

On-chain analyst Willy Woo asserts that Bitcoin (Bitcoin) Will break through the resistance level of 42,000 USD in the next attempt.

Researchers made a bullish analogy based on the so-called Rick Astley indicator, which is a heat map that tracks investors—the Rick Astleys of this world—buying Bitcoin to hold assets for a longer period of time.

The indicator earlier predicted a surge in the price of Bitcoin based on investor buying activity below certain technical resistance levels.

Use the heat map on the Bitcoin chain to track investors’ buying and holding habits. Source: Willy Woo

However, Woo pointed out that “hardline long-term investors are absorbing” a supply of bitcoin below $42,000, which improves the prospect of the cryptocurrency closing above that level.

Bitcoin’s 90-day moving average moves to Rick Astley and is about to cross bullish. Source: Willy Woo, Glassnode

“When we are below the upper resistance limit, powerful HODLers have been taking advantage of this opportunity to acquire a lot of coins,” Tweet Woo.

These statements were issued a day after Bitcoin Recycle Its psychological resistance is at $40,000 as support.

Despite the imminent profit-taking sentiment, BTC remained above the lower price limit on Friday. As of 12:05 UTC time, it hit an intraday high of US$41,191 and then retreated to US$40,360.

Due to the tendency to reject bullish breakout attempts above the $40,000-42,000 area, Bitcoin’s upward outlook looks limited.In detail, the BTC/USD exchange rate has made at least ten attempts to close above the above range since then The infamous cryptocurrency crash on May 19,

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

But each time, the strong selling pressure in the region will cause the BTC/USD exchange rate to fall to the range of 30,000-35,000 US dollars.

Supply tightness is underway

Woo’s upward forecast also implies a tight supply-in this case, the available supply of Bitcoin is lower than its spot market demand, leading to higher bids.

related: The target of this bullish Bitcoin options strategy is $50,000, and there is no liquidation risk

Woo Already applied His own “liquid supply shock” indicator concluded that the market ran out of Bitcoin.

The impact of Bitcoin supply on its price. Source: Willy Woo

In detail, Liquid Supply Shock is the ratio of the tokens that traders cannot buy to the tokens they can buy. Woo calculates the supply shock by dividing the tokens held by strong investors by the tokens held by speculative investors.

Woo said: “As powerful holders continue to lock it in for long-term investment, coins are quickly disappearing from the available market,” adding that tight supply could push Bitcoin to $55,000.

“Since the fourth quarter of 2020, I have not seen such a supply shock opportunity. At that time, the price of BTC was US$10,000, but it will be re-priced to US$60,000 in the next few months. Our supply shock is still In play, prices are expected to rise.”

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