Crypto markets suffered major whipsaw action in morning U.S. trade, with bitcoin BTC$86,621.38 in the space of a few minutes rallying from around $87,000 to above $90,000 and then back to the $87,000 area.

The largest crypto was recently trading at $87,300, down by 0.5% over the past 24 hours after being higher by more than 3% minutes earlier.

The quick decline happened alongside sharp losses for artificial intelligence-related stocks, with Nvidia, Broadcom and Oracle suffering 3%-6% drops. The tech-centric Nasdaq was lower by more than 1%.

Helping to deflate AI sentiment, Blue Owl Capital was reported to have pulled out of funding a $10 billion deal for an Oracle data center in Michigan.

The sudden price swings triggered over $190 million in liquidations across crypto derivatives markets in the past four hours, CoinGlass data shows. The volatile action hit $72 million in long positions, seeking to profit from rising prices, and $121 million in shorts, betting on a decline.

Shrinking liquidity at the margin is the main culprit behind bitcoin's directionless trading, making it vulnerable to any outside pressure, Hunter Rogers, co-founder of the bitcoin yield protocol TeraHash, said in a note.

"I think we’re now seeing an exhausted market," he said. "In that environment, even mild selling activity pushes the market lower."

He added that BTC needs to hold the $80,000-$85,000 area as support, which could decide if fresh lows or a more sustainable rebound come next.