Behind Bitcoins Recent Slide: Imploding Bets and Forced Liquidations – The Wall Street Journal

Bitcoins rally appears to be running out of steam, at least for now.

The digital currency dropped again Friday, briefly falling below $50,000a decline of more than 20% from its record of $64,829 on April 14.

Bitcoins high coincided with the stock-market debut of Coinbase Global Inc., the biggest U.S. cryptocurrency exchange. The two events marked the pinnacle of a heady rally for cryptocurrencies that began last year. Bitcoins price more than tripled in 2020 and doubled to start 2021 before slipping.

The rally cratered last Saturday when bitcoin suddenly fell as much as 17% to $52,149with half the decline occurring in about 20 minutes. Although it recovered some of those losses by Monday, the price has steadily declined, sitting Friday afternoon at $50,620.

Bitcoins momentum lately has been showing signs of flagging, said Michael Oliver of the research firm Momentum Structural Analysis. Since bitcoin crossed $60,000 in March for the first time, its pace of gains has slowed and it has traded in a relatively narrow range. That was a sign, he said, that the rally could falter, as it finally did over the weekend. We think bitcoins broken for the time being, he said, pointing to technical trend lines.

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Behind Bitcoins Recent Slide: Imploding Bets and Forced Liquidations - The Wall Street Journal