U.S. stocks are bound to drop at the open! Jane Street's $2.5 billion position suspected of manipulating the Bitcoin crash

Since early November, Bitcoin has exhibited a regular pattern of falling every day after the 10 a.m. U.S. stock market open, suspected to be manipulated by high-frequency trading giant Jane Street. The company holds $2.5 billion of BlackRock’s IBIT ETF. During the weekend’s low-liquidity period, Bitcoin first dropped from $89,700 to $87,700, triggering $171 million in long liquidations, and then quickly rebounded to $91,200—a typical two-way liquidation manipulation tactic.

Three Key Pieces of Evidence of Abnormal Market Behavior

Bitcoin’s performance in Q4 has been far below historical norms, raising market suspicions about manipulation. Analyst Ash Crypto points out that since the market crash in October, the U.S. stock market has risen 8%, with many stocks hitting all-time highs. Yet, Bitcoin remains 29% below its pre-crash level, and any short-term rebound has been met with heavy selling. Such divergence is extremely rare in a bull market.

Even more unusual is the market’s persistent irrational behavior, failing to respond positively to good news as it usually would. For example, MicroStrategy announced this week that it purchased 10,624 Bitcoins for $962.7 million—a scale of institutional buying that would historically drive prices higher. However, on December 9, Bitcoin dropped another 0.70%, completely ignoring the bullish news. Negative news triggers the same selling pattern, showing the market’s information response mechanism has broken down.

The third piece of evidence is the ongoing liquidation cycle. Approximately every other day, there are $500 million worth of liquidations, indicating continuous forced selling. If this were just leverage unwinding, it should be short-term and the market should rebound quickly, but in reality, selling persists without any significant rebound. Weekend price action is even more telling: Bitcoin dropped from around $89,700 to $87,700 during low liquidity, triggering about $171 million in long liquidations, and then within a few hours reversed sharply, surging to around $91,200 and wiping out $75 million in short positions. This two-way liquidation pattern repeats during low-liquidity weekends.

Manipulation Suspicion Over Jane Street’s $2.5 Billion Position

(Source: Trading View)

Market observers have noticed a clear trend: Bitcoin often sees significant drops around 10 a.m., right after the U.S. stock market opens. This pattern has persisted since early November and echoes similar trends observed earlier this year. The consistency suggests a coordinated strategy, not a random reaction.

Analyst Bull Theory points out that high-frequency trading giant Jane Street may be the driving force. Reportedly, Jane Street holds $2.5 billion of BlackRock’s IBIT ETF, its fifth-largest position. Chart analysis shows the pattern is too consistent: a price plunge within the first hour after the open, followed by a slow recovery. This is typical high-frequency trading behavior. It suggests that Bitcoin’s sharp declines are not due to macroeconomic weakness but rather manipulation by a major institution.

Three-Step Profit Cycle of High-Frequency Trading

Sell Off at Market Open to Push Down Price: Dump large amounts of ETF shares at the U.S. market open, using the high trading volume to create panic.

Repurchase During Liquidity Zones: After the price drops to a predetermined liquidity-rich level, buy back the same or a greater number of shares at a lower price.

Repeat the Cycle to Accumulate Holdings: Continuously repeat the cycle, profiting from predictable volatility and accumulating billions of dollars’ worth of Bitcoin.

The problem with tracking Jane Street is that they don’t trade on-chain but operate through ETFs. We can’t trace their moves, unlike market makers like Wintermute who trade on-chain via Binance. The ETF’s opacity provides perfect cover for such manipulation.

Wash Trading and Regulatory Loopholes

This strategy is known as “wash trading” in traditional financial markets and has been illegal in stock markets since 1933. But there are currently no such laws in the crypto space, so high-frequency traders can freely engage in wash trading until the Market Structure Act passes. This regulatory gap provides institutional manipulation with a veneer of legitimacy.

Even more concerning, this manipulation may involve multiple major institutions. Rumor has it that many large funds suffered liquidations on October 10 and are selling Bitcoin to cover losses. This passive selling, combined with Jane Street’s active manipulation, creates a vicious cycle that continues to suppress Bitcoin’s price.

Even so, analysts believe this influence may be temporary. Once major operators complete their accumulation phase, Bitcoin could resume its upward trend driven by fundamentals. The key is when a regulatory framework will be in place and when the market can break free from this organized manipulation pattern.