When it hit a low of $30,000.51, bitcoin was down over 50% from its all-time high of $64,829 in mid-April.

A perfect storm engulfed bitcoin today as a sell-off that was gathering pace since last week intensified and perhaps climaxed at the day’s low of $30,000.51. A confluence of factors appears to be behind the crash in bitcoin, including Elon Musk, Chinese saber-rattling against cryptos, and a risk-off environment taking hold on Wall Street. (CNBC)

“Liquidation event”

Crypto permabull Mike Novogratz categorized the brutal sell-off as a “capitulation” and a “liquidation event” as bitcoin fell through $40,000 and then nearly sliced $30,000 like a hot knife through butter.

“Humpty Dumpty never gets put back together in two days … when he cracks. It’s going to take a while. The market will consolidate. It will find a bottom somewhere. I’m hoping it’s close to here,” Novogratz said, suggesting it could be around $36,000 to $38,000.

Indeed, Justin Sun, a tech entrepreneur who founded the cryptocurrency platform Tron, tweeted that he bought $152 million in bitcoin for about $37,000 a coin.

“A lot more people own crypto. Crypto has seeped into pockets all over our society and you had a confluence of events — a combination of tax day, Elon Musk tweets, whatnot, where you started breaking down the positivity in the price action, and now we’ve got a liquidation event,” Novogratz said to CNBC.

Liquidation is right – today’s fall has eliminated any paper profits investors were sitting on after those heady days when Elon Musk emerged as a kind of bitcoin evangelist announcing a $1.5 billion investment in the crypto, and offering to sell his cars in exchange for it.

Gold the old favorite

Meanwhile, a report by JP Morgan said institutions were likely shifting back from bitcoin to gold, reversing a recent popular trade of selling out the old fuddy-duddy yellow metal for hot new cryptos.

“The bitcoin flow picture continues to deteriorate and is pointing to continued retrenchment by institutional investors,” JPMorgan wrote in a note to clients. “Over the past month, bitcoin futures markets experienced their steepest and more sustained liquidation since the bitcoin ascent started last October.”

Recovery…or bear rally?

As this is being written, bitcoin made a u-turn off its lows and briefly reclaimed the $40,000 level.

However, selling appears to have reemerged and it is now trading around $38,500.

It is a moot point whether the crypto will resume its uptrend or head back south to retest #30,000.

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