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

A sudden recent drop in the price of bitcoin suggests the digital currencys yearlong rally might finally be running out of steam.

Bitcoin fell as much as 17% on Saturday to $52,149, with about half the decline occurring in about 20 minutes late in the evening Eastern Time. Although it recovered some of those losses by Monday morning, the price has steadily declined this week. It was trading at $49,334 early Friday.

Bitcoin topped out at $64,829 on April 14, the same day Coinbase Global Inc., the biggest U.S. cryptocurrency exchange, went public in a highly anticipated offering. 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.

Yet that 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