Bitcoin rebounded as much as 15% on Monday to trade around $38,683 per coin after a vicious sell-off over the weekend. The cryptocurrency slipped 18% to $33,674 at intraday lows on Sunday.
The crypto space has faced a tough few weeks of risk-off sentiment causing the total industry market cap to fall over the weekend to $1.57 trillion from record highs of $2.56 trillion on May 12, according to data from CoinMarketCap.com.
Mark Cuban called the sell-off the “Great Unwind” in a tweet on Sunday, arguing crypto traders were forced to unwind their leveraged trades amid falling prices in the space.
“Traders borrow to buy Eth, used eth to borrow alt/stable coin, used that to LP a high APY Pair, took the SLPs and staked them to maxout yield. The minute Eth drops to their Tragic Number, they had to Unwind. Unstake, Remove Liqudity, Repay,” Cuban wrote.
Some bitcoin experts believe the recent downturn may be over, however. Pankaj Balani, the CEO of Delta Exchange, a crypto derivatives exchange, told Insider that he believes “most of the leverage is out of the system now and bitcoin should start to form a base here.”
On the other hand, Paul Krugman, a noted economist and Nobel Laureate, published an op-ed titled “Technobabble, Libertarian Derp and Bitcoin” last week where he compared the crypto craze to “a natural Ponzi scheme.”
Krugman was roundly mocked by the crypto community for his comments, with bitcoiners pointing out the economist had previously said the fax machine was going to have as much impact on the economy as the internet.
“By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s,” Krugman wrote in a 1998 Red Herring article.
In other bearish news, JP Morgan analysts said in a note to clients on Monday that it was “too early to call the end of the recent bitcoin downtrend.”
The JPMorgan team said there is “a significant risk of further de-risking given continued decay in our lookback period momentum signal and given the absence of buying in either the bitcoin fund space or the regulated bitcoin futures space.”
Despite the falling price of crypto assets, over the weekend bitcoiners celebrated Bitcoin Pizza Day.
The holiday pays homage to Laszlo Hanyecz, who paid for two pizzas using 10,000 bitcoins in the first-ever transaction using the currency 11 years ago.
At the time the 10,000 bitcoins were worth roughly $41, now they are worth more than $3.8 billion.
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