Traders say a correction to lower support levels and standard profit-taking was expected after Bitcoin’s swift ascension to $50,000.
The euphoria seen across the cryptocurrency ecosystem over the past couple of weeks was tampered down on Aug. 26 as an early morning attempt by bulls to push the price of Bitcoin to $50,000 was soundly rejected.
Data from Cointelegraph Markets Pro and TradingView shows that following its rejection, the price of Bitcoin slid to a low of $46,457 before bulls managed to regroup and put a halt to the downturn.
The $50,000 price level was identified as a critical area for Bitcoin by market analyst and Cointelegraph contributor Michaël van de Poppe, who posted the following tweet outlining the significant support and resistance areas.
According to van de Poppe, Bitcoin is likely to spend some time in a downward trend following this latest pullback, but there is a significant amount of support at the $44,000 level that could protect it from further decline.
The $51,000 price level was noted by van de Poppe as an important price to overcome to invalidate the current bearish trend.
Traders expect the $46,200 support to hold
According to Whalemap, a crypto-focused data tracking service, the calls for a lengthy bear cycle are premature at best according to on-chain data.
The $46,200 support level is important as the next support level is found at $39,600. On-chain data also shows that there is a limited amount of selling volume between $46,200 and $57,400.
Profit-taking at $50,000 was expected
Crypto analyst Will Clemente issued some reassuring words on Aug. 24 when warned of a possible short-term bearish pullback based on exchange inflows and whale wallet activity.
Thursday’s pullback in the market showed that Clemente’s concerns were warranted and the analyst followed up the previous tweet with, “I think the large portion of this short-term move is probably over.”
In a separate tweet, Clemente said:
“It’s not unexpected to see some profit-taking after the move up to $50,000, but watching the rate at which this is happening and more importantly, are sellers willing to start selling at a loss? Some clues can be offered by Realised P/L, SOPR, SOAB, ASOL, and Realised Gradient.”