The cryptocurrency market experienced a significant downturn recently, with Bitcoin leading the plunge.

Fred Krueger, a notable figure in the investment community, took to X to analyze the cause behind this sudden crash, putting forward a complicated theory.

Did massive bet backfire?

According to Krueger, a large fund was engaged in a risky trading strategy involving shorting MicroStrategy (MSTR) stock while simultaneously buying Bitcoin (BTC), with a staggering $1 billion allocated to each side of the trade.

His strategy backfired last Friday when the fund was forced to stop out, leading to the sale of $1 billion worth of Bitcoin.

This massive sell-off allegedly triggered further liquidations in the market, compounded by sales from smaller investors, referred to colloquially as "shrimp, crabs and fish."

As reported by U.Today, MicroStrategy, a Virginia-based enterprise software company known for its significant Bitcoin holdings, has surprisingly surpassed Amazon in trading volume.

This surge was part of a broader trend of increasing enthusiasm in the equitized Bitcoin complex, which now boasts over $20 billion in daily trading volume.

Skepticism and Bitcoin's current state

Krueger's analysis sheds light on a possible catalyst for Bitcoin's recent crash, but not everyone in the crypto community is convinced.

A post from Josh Olszewicz, a prominent analyst and former head of research at Valkyrie Investments, questioned the viability of the trading strategy outlined by Krueger. He suggested that such a trade would have likely failed before the events of last Friday.

Amid this debate, Bitcoin's price has shown little resilience, currently trading just above the $66,000 level.

Earlier this week, the flagship coin surged to a new all-time high of $73,000.