Why Is the Bitcoin Price Dropping Again? Analyst Points to Trading Desk Manipulation

In recent days, Bitcoin's price has experienced a sharp decline, prompting crypto analyst Bull Theory to weigh in on the situation. According to Bull Theory, Wall Street traders have been manipulating the market, causing these unsettling price dips.

Key Takeaways

Market Manipulation: Analyst Bull Theory blames trading firm Jane Street for manipulating Bitcoin prices.
Recurring Pattern: Significant price drops often occur at 10 a.m. ET on market open.
Accumulating BTC: Jane Street reportedly holds $2.5 billion in Bitcoin, using manipulative strategies to lower prices.
FOMC Meeting Risks: Bitcoin faces potential decline after the FOMC meeting, based on past reactions to such events.
Current Price: As of the latest reports, Bitcoin is trading around $92,600, showing signs of volatility.

Bitcoin

Analyst's Insight into Bitcoin's Price Decline

In a post on X, Bull Theory attributed the ongoing Bitcoin crash to the trading firm Jane Street. He observed that every day at 10 a.m. ET—coinciding with the opening of U.S. markets—Bitcoin tends to drop significantly. Notably, BTC managed to erase 16 hours of gains in just 20 minutes once the market opened, a pattern that has persisted since early November when Bitcoin fell below $100,000. A similar trend was also noticed earlier in the second and third quarters of this year.

Bull Theory referenced another analyst, Zerohedge, who suggested that Jane Street is likely the culprit behind the Bitcoin price drops. He indicated that the data reveals a recurring pattern: a substantial drop within the first hour of the market opening, followed by a gradual recovery. This, he believes, illustrates classic high-frequency trading tactics that align with Jane Street's operational profile.

Bitcoin
Source: Chart from Bull Theory on X

According to Bull Theory, as one of the largest high-frequency trading firms globally, Jane Street possesses the speed and liquidity needed to influence market movements swiftly. He claims that their strategy involves selling off BTC at market open, pushing the Bitcoin price into liquidity pockets, and then re-entering the market at a lower price.

As a result of this strategy, Bull Theory believes that Jane Street has accumulated significant amounts of Bitcoin, reportedly holding $2.5 billion worth of BlackRock’s Bitcoin ETF, marking it as their fifth-largest investment. He argues that the recent Bitcoin price drops are primarily due to manipulation rather than macroeconomic factors, anticipating that Bitcoin could regain its upward momentum once these large players finish buying.

Bitcoin Could Face Further Declines After FOMC Meeting

Crypto analyst Ali Martinez has warned that Bitcoin might face a substantial price decline following today’s Federal Open Market Committee (FOMC) meeting. He highlighted that historically, Bitcoin has reacted poorly to FOMC meetings, with six out of seven instances this year resulting in price corrections.

Yesterday, Bitcoin surged as high as $94,500, fueled by the expectation of a third interest rate cut from the Federal Reserve this year. Current projections from CME FedWatch indicate a 90% likelihood that the Fed will reduce rates by 25 basis points (bps). A report from CryptoQuant suggested that these rate cuts have often turned into "sell the news" events, raising concerns about a repeat of this price behavior.

As of now, Bitcoin's price is hovering around $92,600, reflecting a slight decline in the past 24 hours, according to CoinMarketCap data.

Bitcoin BTC trading at $92,721 on the 1D chart | Source: BTCUSDT on Tradingview.com