The sudden drop followed yesterday's almost-as-sudden surge back above the $30,000 mark.

"Deep correction on the markets, as Bitcoin can't hold at $29,700-29,800 and shoots downwards through a cascade of liquidations," Michaël van de Poppe, founder and CEO of trading firm Eight, reacted.

As CoinTelegraph reports, hours prior, monitoring resource Material Indicators had flagged changing conditions on the Binance order book, arguing that the result could still swing both ways, with either bulls or bears profiting.

Notably, this was exacerbated by a so-called long-squeeze...

"The hotter-than-expected U.K. CPI may have weighed over risk assets, including BTC. But the gravity of the reaction has been far far more severe than in other asset classes," Vetle Lunde, a senior analyst at K33 Research, told CoinDesk.

"Seems to be more of a leverage washout. Binance OI in BTCUSDT perps fell 5.1% in 15 minutes, effects more severe in ETH with larger liquidation volume than BTC," Lunde said, referring to open interest, or the total number of contracts in the futures market.

Equity futures have seen waves of selling pressure overnight too...

Prominent Crypto Twitter trader @52kskew pointed out that a 16,000 bitcoin sell order, worth over $467 million at current prices, preceded the dump, which may have initiated the long squeeze.

"16K BTC is unusual size to be market sold solely from Binance spot usually the kind of sale happens before bad news comes out," @52kskew opined in a follow-up tweet.