Bitcoin could be on the verge of a big breakout at $42K, hodler activity suggests
Bitcoin has had a strong year, but even though it’s only the third most valuable cryptocurrency by market cap, it’s been a monster run. Since the beginning, Bitcoin’s price has increased by more than $3,000, or roughly 60 percent. That’s not just a great return on investment. That’s a better return on investment than just about any type of traditional investment you could make.
For the first time since last summer, Bitcoin has broken the $42,000 mark. And this time it wasn’t just the price of the digital currency that’s jumped. Activity on Coinbase, the most popular platform for buying and selling Bitcoin and other cryptocurrencies, has reached all-time highs. At the time of writing, the Bitcoin price hit $42,250, so Coinbase’s daily volume of BTC was over $1.6 billion.
Bitcoin is still one of the most well-known cryptocurrencies, but its market cap is still small compared to its rivals. But ever since the price of Bitcoin dipped to $5100 in January, a lot of people have started investing in it again. This is because they believe Bitcoin’s price will rise again in the near future, and by predicting its price, they may be making large profits.. Read more about ethereum news hodl and let us know what you think.
Willy Woo, an on-chain expert, predicted that Bitcoin (BTC) will break over the $42,000 barrier mark in the near future.
The researcher’s optimistic comparison was based on the so-called Rick Astley indicator, a heat-map that monitors investors (the Rick Astleys of the world) who purchase Bitcoin with the intention of holding it for extended periods of time.
Based on investors’ purchasing behavior below specific technical resistance levels, the indicator previously forecast Bitcoin price increases.
The Bitcoin on-chain heat map was used to monitor investors’ buy-and-hold behavior. Willy Woo is the source of this information.
Woo, on the other hand, said that “strong-handed long-term investors are absorbing” the Bitcoin supply below $42,000, indicating that the cryptocurrency’s chances of closing above the level are improving.
Bitcoin’s 90-day moving average is set to cross bullish, according to Rick Astley. Willy Woo of Glassnode is the source of this information.
“Strong HODLers have been scooping huge quantities of coins while we’re beneath the resistance ceiling,” Woo said on Twitter.
Bitcoin regained its psychological barrier level of $40,000 as support the day before, according to the remarks.
Despite impending profit-taking sentiment, BTC held above the price floor on Friday. As of 12:05 UTC, it had reached an intraday high of $41,191 before falling down to $40,360.
Due to its propensity to reject bullish breakthrough attempts above the $40,000-$42,000 range, Bitcoin’s upward possibilities seemed restricted. After the infamous crypto collapse on May 19, the BTC/USD exchange rate has attempted at least 10 attempts to close above the stated range.
Bitcoin is now trading below the $42,000 barrier mark. TradingView.com is the source for this information.
However, each time there is significant selling pressure in the region, the BTC/USD prices drop to the $30,000-$35,000 level.
Currently, there is a supply shortage.
Woo’s bullish forecasts included a supply squeeze scenario, in which the available Bitcoin supply falls below the current market demand, resulting in higher bids.
This bullish Bitcoin options strategy aims for $50K without the danger of being liquidated.
Woo used his own “Liquid Supply Shock” metric to determine that the market for Bitcoin has run out.
Bitcoin’s price is being affected by a supply shock. Willy Woo is the source of this information.
Liquid Supply Shock is the ratio of coins that traders are unable to purchase against coins that they are able to purchase. By dividing the coins owned by strong-handed investors by the coins held by speculative investors, Woo estimates the supply shock.
“Coins are quickly vanishing from the open market as strong holders continue to lock them up for long-term investment,” Woo said, adding that the supply crunch may push Bitcoin above $55,000.
“I haven’t seen a supply shock opportunity like this since BTC was priced at $10k in Q4 2020, only to be repriced at $60k a few months later; our supply shock is still in play, with higher prices anticipated.”
The author’s thoughts and opinions are entirely his or her own and do not necessarily represent those of Cointelegraph.com. Every investing and trading choice has risk, so do your homework before making a decision.
The price of bitcoin has been rising since it bottomed out at $3,000 in February. The cryptocurrency’s price has followed a similar path to that of a major asset class, as it breached similar support levels at the end of August and early September. The price was recently surpassing resistance levels at $42,000, which could be a sign of another major move in BTC’s price.. Read more about bitcoin bull trap 2021 and let us know what you think.
This article broadly covered the following related topics: