Behind Bitcoin’s recent slide: Imploding bets and forced liquidations

Bitcoin’s rally appears to be running out of steam, at least for now.

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

Bitcoin’s 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. Bitcoin’s 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 $52,149—with 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.