The price of bitcoin on the CoinDesk Bitcoin Price Index (BPI) has declined more than $60 today (by the time of publication), falling to a low of $435.60. However, a more serious decline was observed at one major bitcoin exchange.

The development is the latest blow to the price of bitcoin, which had slumped to its lowest level since May late last week. The decline has since been largely attributed to a worsening short-term news outlook, as well as the industry's margin traders, though alternative theories have been proposed.

At press time, at least one notable industry analyst, along with a host of exchange users are suggesting that margin trading may have once again played a factor in today's decline, as a flash crash observed on popular bitcoin trading platform BTC-e caused the price of bitcoin on its exchange to decline sharply to a low of $309.

That price was observed on BTC-e at roughly 07:36 (UTC), and was followed by similar declines across other major bitcoin trading platforms including Bitstamp, Huobi and OKCoin, market analysis shows.

Notably, this is not the first time such a large flash crash has been observed on BTC-e. For example, this February, the price on the exchange declined nearly $500 in just over one minute.

Data analysis shows other major exchanges soon responded to declining prices observed on BTC-e, with a sharp drop observed across their order books at roughly 07:37 (UTC).

By 07:46, the price of bitcoin on Bitstamp began its decline, landing roughly $20 below its starting point to touch $462.01 and hitting a daily low price of $442 at roughly 08:51.

Major China-based Huobi and OKCoin also recorded less notable drops during this time. For example, Huobi's price decline began at 07:37, dropping from ¥2880.1 to ¥2788.1 by 07:45. Likewise, OKCoin saw prices on its exchange fall from ¥2880.4 at 07:36 to ¥2785.3 by 07:45.

At press time, China's markets were down roughly 6% for the day to reach ¥2,832.27, according to the CoinDesk Chinese yuan BPI.

In a new post on his quantitative analysis blog Matlab Trading, margin trading critic Raffael Danielli was quick to assert that the practice was chiefly behind today's market movements. BTC-e began offering margin trading to its customers last November.

Danielli told CoinDesk:

Danielli has been vocal in his belief that margin trading contributed to last week's decline, and has been critical of major exchanges, which he claims have remained opaque about the internal safeguards they use to flag suspicious orders that could be influencing price.

Still, Danielli was quick to temper his comments by indicating that there is a lack of information available for the market to reach any conclusion, saying:

Other market observers suggested the overall weak market contributed to the situation on the exchange. Independent investor Tuur Demeester told CoinDesk:

Major bitcoin exchanges have remained in favor of margin trading, suggesting they do their best to inform traders of the risks associated with the offerings and that they have internal safeguards to mitigate wider market damage that could result from the practice.

Notably, Bitfinex vice president of business development Josh Rossi took to Reddit on Friday to respond to user questions and give the exchange's official take on the day's events.

Speaking to CoinDesk, both Bitfinex and OKCoin responded to Danielli's criticisms, citing competitive interests as the motivating factor behind not being fully transparent about these policies.

"If it becomes public knowledge traders can use it to their advantage and find out ways to get around our preventative measures," said OKCoin's manager of international operations Zane Tackett.

CoinDesk will continue to monitor this developing story.

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