Bitcoin surged from about $91,000 to over $94,000 in just two hours during U.S. trading hours on Tuesday, surprising many traders. Some celebrated the sudden price rally, while others raised warning signs – calling it a textbook example of market manipulation.
One of the biggest concerns is the lack of a fundamental reason.
No catalyst visible, but millions flowed in within minutes.
Cryptocurrency trader Vivek Sen noted that there were no significant news or announcements to explain the sudden price movement. The lack of a identifiable catalyst has increased speculation that the movement was orchestrated rather than natural.
On-chain analysts quickly found anomalous trading patterns. According to DeFi researcher DeFiTracer, market maker Wintermute bought $68 million worth of Bitcoin during the rise in just one hour. Another analyst, DefiWimar, claimed that several large players, including Coinbase, BitMEX, and Binance, made significant coordinated purchases and described the activity as coordinated manipulation.
Experienced trader NoLimitGains detailed why the movement felt artificial. He pointed out several warning signs: thin order books that allowed prices to be pushed up cheaply, massive market buys in a tight timeframe, and zero continuation after the initial rise. He noted that real bull movements build structure, while manipulated movements create traps.
Traders on both sides were liquidated – a classic sign of the hunt for liquidity.
The most compelling argument relates to the hunt for liquidity. In this strategy, large players intentionally move the price to trigger forced liquidations.
As traders open leveraged positions, they set liquidation prices where the position is automatically closed as the market moves in the opposite direction. Liquidation levels accumulate at predictable price points, creating 'liquidity pools' that experienced players can target. When Bitcoin's price is pushed sharply upward, large players can trigger short liquidations, forcing bearish traders to buy back their positions at unfavorable prices. Forced buying reinforces the price rally, allowing manipulators to sell their holdings to artificially high demand.
Trader Orbion highlighted this dynamism and noted that during the day there were $70 million in long liquidations and $61 million in short liquidations – both sides were wiped out in hours.
NoLimitGains warned that historically such rapid rises tend to drop sharply back. As funding costs rose and Open Interest grew quickly, warning signs were clear. He assessed that the situation indicated large players were preparing to sell into the excitement of retail investors.
Not everyone is convinced that it was manipulation.
However, not all analysts believe in manipulation. On-chain analyst Darkfost referenced U.S. employment data released at the same time, which could serve as a justified catalyst. There were 7.67 million JOLTS job openings in October – clearly above the forecast of around 7.0 million – and ADP's weekly statistics turned positive after several weeks of decline.
He noted that Bitcoin rose about 4% immediately after the data release. As the FOMC meeting approaches and a rate cut is widely expected, according to Darkfost, the macroeconomic backdrop provided genuine supportive factors for risk investments. This suggests that the price rally might have been driven by fundamental factors rather than just manipulation.
At the time of writing, Bitcoin had retreated from its peak levels and was changing hands at around $92,500.
