‘A perfect storm’ as bitcoin stages weekend crash that puts it on verge of ‘breakdown.’ Here’s what crypto bulls are saying.

A downturn in global stocks appears to be spilling over into the nascent crypto market, with a bout of weekend selling erupting into a mini-flash crash in prices of bitcoin and other notable digital assets.

At last check Saturday afternoon New York time, bitcoin
was changing hands at $48,186.96 on CoinDesk, down 12% over the past 24 hours, but the overnight descent, in the early hours of Saturday morning, had been even more harrowing. Bitcoin’s slump to around $42,000 on some exchanges meant that it had tumbled nearly 30% peak to trough on a 24-hour basis.

NYDIG, a technology and financial services firm dedicated to Bitcoin, said that the decline was even more severe for some offshore platforms such as Huobi, where bitcoin briefly touched a 24-hour nadir at $28,800.

That is a gut-wrenching fall, that may even leave some veteran crypto bulls feeling a touch queasy.

The drop also meant that the total market value of the crypto universe, as tracked by CoinMarketCap.com, shed nearly $400 billion to around $2 trillion, before recovering to around $2.2 trillion.

Source: CoinMarketCap.com

So what precipitated the drop? It isn’t 100% clear.

The analysts at CoinDesk blamed at least some of the downturn on trading in crypto derivatives, amplified by growing concerns about the prospects for tighter financial conditions that is forcing a repricing of assets that are sensitive to potentially rising borrowing costs.

“The decline was likely in part technically-driven, exacerbated by the derivatives market, and not helped by the downside momentum behind high-growth stocks on Friday, to which bitcoin has been positively correlated,” wrote Katie Stockton of Fairlead Strategies, in a Saturday morning note.

NYDIG estimates that $1.1 billion of leveraged bitcoin positions and $2.5 billion of crypto leveraged positions (including bitcoin) have been liquidated in the past 24 hours, representing the largest such notional liquidation since…



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