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Pedro Aunion Monroy, a Spanish performance artist living in Britain, tumbled around 30 metres (100 feet) during a dance routine at the Mad Cool event in the Spanish capital late Friday.
"I regret to tell you he died today," his sister Estefi Chaje posted on Facebook. "He was doing what he loved the most... We are devastated."
Organisers of the three-day music festival, which featured acts including US rock bands Foo Fighters and Green Day, issued a statement saying the event would continue despite the "terrible accident".
Many commenters were angry at the decision.
"I've just seen a guy fall and die, all projected on the giant screen. And thousands of people carried on dancing. I'm lost for words," tweeted one festival-goer.
Green Day played their Friday night headline set as planned, apparently unaware of Monroy's death.
- Green Day (@GreenDay) July 8, 2017
- Green Day (@GreenDay) July 8, 2017
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