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Bitcoin (BTC) continues its volatile trajectory today, falling by 0.70% in the last 24 hours. The decline in assets raised concern among traders.
Some analysts argue that Bitcoin’s performance is the result of potential price manipulation, which indicates a recurring pattern of decline around the US market open, as well as institutional participation.
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Insider Manipulation vs. Market Dynamics: Decoding Bitcoin’s Decline
Bitcoin defied all bullish expectations in the fourth quarter, a traditionally strong period for the asset. While the October 10 market crash was a major factor behind Bitcoin’s decline at the beginning of the quarter, market watchers are beginning to question the sustainability of this weakness.
Traders are increasingly frustrated with Bitcoin’s lack of responsiveness to the evolution of the market. For example, Strategy (formerly MicroStrategy) announced yesterday that it had purchased 10,624 Bitcoins for $962.7 million.
Despite this bullish news, Bitcoin is in the red today, down 0.70% and trading at $90,487.
On the other hand, negative developments also lead to the same sales model. Analyst Ash Crypto noted that the market continues to act illogically and does not respond to positive developments as expected.
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In a separate post, Ash suggested that Bitcoin’s collapse from $126,000 to $80,000 could not be considered a normal market correction. He said that since Market crash and historic liquidation in October: :
- US stocks rose 8%, with many stocks hitting all-time highs.
- However, Bitcoin is still down 29% from its pre-crash level, and any short-term rallies are met with heavy selling.
- About 500 million dollars in liquidations occur approximately every two days, indicating the ongoing forced selling.
“If it was just a matter of leverage, it should have been short-term and the market should have rewarded very quickly, but instead we continued to sell without significant rebounds,” he said. “This is not normal. It seems that some large institutions play the market and liquidate the purchases and sales. Another rumor in the city is that many large funds had a crash on October 10 and sold BTC to cover their losses.” He added.
Another analyst also pointed to Bitcoin’s price action over the weekend as evidence of the latter Handling. The post revealed that the cryptocurrency briefly fell from about $89,700 to $87,700, liquidating about $171 million of long purchases.
Within hours, the move reversed sharply, pushing Bitcoin higher to around $91,200, shedding an additional $75 million in short buying.
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“This is another example of a weak liquid weekend being manipulated to wipe out both short and long purchases,” wrote Bull Theory.
Is Jane Street Behind Bitcoin’s Morning Decline?
Continuity refers to a coordinated approach rather than a haphazard response. Bull Theory points to Jane Street, a large high-frequency trading firm, as a possible source. Jane Street holds what is said to be $2.5 billion In BlackRock’s IBIT ETFmaking it the fifth largest center.
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“When looking at the chart, the pattern is too consistent to miss: a clean sweep in one hour of the open market followed by a slow recovery. This is the classic high-frequency execution. This means that most of the fall in BTC is not due to general weakness, but to manipulation by a major entity,” the analysis revealed.
I suspect the strategy is simple. High-frequency traders sell Bitcoin on the open market, pushing the price toward pockets of liquidity, and then buy back at lower levels. They repeat this cycle, taking advantage of expected fluctuations and…Accumulating billions in Bitcoin.
Marty Barty said Saying That “Yes, this is called wash trading which has been illegal in the stock market since 1933. There are no laws on the crypto that can wash the trade as they want until the project of the market structure is passed. The problem with the tracking of Jane Street is that they do not do it on the chain, they do it for ETFs. We cannot follow their movements, but the Wintermute of Jane Street is fully used.”
The analyst believes, however, that the impact may be temporary. As the major players complete their consolidation phase, Bitcoin could resume its upward trajectory driven by fundamentals.
