Bitcoin (BTC) has continued its volatile path today, sliding by 0.70% in the last 24 hours. The asset's decline has raised concerns among traders.
However, some analysts argue that Bitcoin's performance is the result of potential price manipulation, citing a recurring pattern of declines around the opening of the U.S. market, as well as institutional involvement.
Internal Manipulation vs. Market Dynamics: Deciphering Bitcoin's Decline
Bitcoin has defied all bullish expectations in the fourth quarter, a period that has historically been strong for the asset. While the market crash on October 10 was a significant factor behind BTC's decline at the beginning of the quarter, market observers are now questioning the persistence of this weakness.
Traders have become increasingly frustrated by Bitcoin's lack of response to market developments. For example, yesterday, Strategy (formerly MicroStrategy) announced it had acquired 10,624 BTC for $962.7 million.
However, despite this positive news, Bitcoin is again in the red today, down 0.70% and trading at $90,487.
Instead, negative developments also trigger the same selling pattern. Analyst Ash Crypto highlighted that the market continues to behave irrationally and does not respond to positive developments as it normally would.
In a separate post, Ash suggested that the drop of Bitcoin from $126,000 to $80,000 cannot be dismissed as a normal market correction. He emphasized that after the market crash and the historic liquidation of October:
U.S. stocks rose by 8%, with many stocks reaching new all-time highs.
Bitcoin, however, remains 29% below its pre-crash level, and any short-term rally has been met with heavy selling.
About $500 million in liquidations occur almost every two days, suggesting a persistent forced selling.
“If it was just a leverage effect, it should have been a very short-term event and the market should have bounced back fairly quickly, but instead, we continued to decline without any major rebound. This is not normal. It seems that some large institutions are playing with the market and liquidating both long and short positions. Another voice in town is that many large funds collapsed on October 10 and are selling BTC to cover their losses,” he added.
Additionally, another analyst pointed to Bitcoin's weekend price action as evidence of recent manipulation. The post revealed that the cryptocurrency briefly dropped from around $89,700 to $87,700, triggering about $171 million in long liquidations.
Within a few hours, the movement sharply reversed, with Bitcoin rising to around $91,200 and wiping out another $75 million in short positions.
“This is another example of manipulation on a low liquidity weekend to wipe out both leveraged long and short positions,” wrote Bull Theory.
Is Jane Street behind the morning dumps of Bitcoin?
Interestingly, the market observer also noted a clear trend: Bitcoin often experiences sharp drops around 10 AM, after the U.S. market opens. This pattern has been visible since early November and mirrors similar activity observed earlier in the year.
The consistency suggests a coordinated approach rather than a random response. Bull Theory points to Jane Street, a large high-frequency trading firm, as a possible source. Jane Street reportedly holds $2.5 billion in BlackRock's IBIT ETF, making it its fifth-largest position.
“When you look at the chart, the pattern is too consistent to be ignored: a complete wipeout within an hour of the market opening followed by a slow recovery. This is a classic high-frequency execution. This means that most of the BTC dump is not due to macroeconomic weakness but to manipulation by a large entity,” revealed the analysis.
The suspicious strategy is simple. High-frequency traders sell BTC at the market open, pushing the price into liquidity pockets, then buy back at lower levels. They repeat this cycle, benefiting from predictable volatility and accumulating billions in Bitcoin.
“Yes, it’s called wash trading and it has been illegal in the stock market since 1933. There are no laws on crypto, so they can wash trade as much as they want until the Market Structure Bill is approved. The problem with tracking Jane Street is that they don’t do it on-chain; they do it through ETFs. We can’t track their movements. Wintermute uses the blockchain with Binance, but Jane Street is completely opaque,” said Marty Party.
Even so, analysts believe the impact may be temporary. Once the major players complete their accumulation phase, Bitcoin could resume an upward trajectory driven by fundamentals.
