Analysts Question Early Bitcoin Plunge Pattern: Is Jane Street Manipulating the Market?

Bitcoin fell another 0.70% in the past 24 hours, continuing its recent volatility, and this trend is raising increasing suspicions of “institutional manipulation.” Several analysts point out that Bitcoin’s frequent sharp declines before and after the US market opens are too consistent, suggesting possible concentrated activity by high-frequency trading institutions.

Currently, the core question in the market is whether Bitcoin’s weakness is caused by internal manipulation rather than natural market dynamics. Although the fourth quarter is typically a strong period for Bitcoin, the cryptocurrency has not only failed to recover since the October 10 market crash, but has continued to underperform US stocks. US stocks are up 8% with multiple equities hitting new highs, while Bitcoin remains 29% below its pre-crash level.

More concerning is that BTC has shown almost the same reaction pattern regardless of positive or negative news. Strategy (formerly MicroStrategy) announced an additional purchase of 10,000 Bitcoins, but instead of boosting prices, it was accompanied by another correction. Additionally, the market has seen approximately $500 million in liquidations almost every other day, yet prices continue to weaken, which is believed to be related to forced selling and potential institutional price suppression.

Several analysts note that the recent “liquidation squeeze” pattern of weekend Bitcoin crashes followed by rapid rebounds is highly consistent with manipulative behavior: first, a sharp drop triggers long liquidations, then a quick rally causes short positions to be liquidated. This “W-shaped liquidation” mechanism is especially evident during periods of low liquidity.

The most prominent accusation comes from market analyst Bull Theory, who points out that since early November, Bitcoin has almost consistently experienced a sharp drop within the first hour after the US market opens, followed by a slow recovery. This high degree of regularity is considered a hallmark of high-frequency trading activity.

Analysts specifically mention the globally renowned high-frequency trading firm Jane Street, which holds about $2.5 billion worth of BlackRock’s IBIT ETF, making it the firm’s fifth largest holding. Analysts believe Jane Street may be executing large-scale sell-offs in the ETF market to drive down Bitcoin’s price, then covering at lower prices, thereby creating a cycle of profit.

Since ETF trading does not occur on-chain, it is difficult for the market to track trading activity, which further fuels concerns about “institutional manipulation behind the scenes.” Industry insiders note that this strategy would be considered illegal “wash trading” in traditional finance, but there are still no clear regulatory restrictions in the crypto market.

Nevertheless, several analysts believe the influence of such institutions may be temporary. Once the main buyers have completed their low-price accumulation, Bitcoin may return to an upward trend driven by fundamentals. (BeinCrypto)