TLDR
- Bitcoin experienced a ~7% rally amid theories that Jane Street discontinued its alleged daily “10 a.m. dump” trading strategy following a lawsuit
- On Feb. 23, Terraform Labs’ bankruptcy administrator filed an 83-page legal complaint against Jane Street, claiming insider trading connected to TerraUSD’s 2022 implosion
- Bitcoin’s price pushed past $68,000, contributing over $170 billion to the overall cryptocurrency market capitalization
- The suspected “10 a.m. dump” pattern resulted in Bitcoin dropping during the initial hour of U.S. market hours in more than 60% of trading sessions since November
- Market watchers indicate Bitcoin must maintain levels above $64,000 and breach $66,535 to continue its upward trajectory
Bitcoin delivered one of its most impressive daily performances this year on Wednesday, climbing nearly 7% to surpass $68,000. This substantial movement injected more than $170 billion into the aggregate crypto market capitalization, elevating it to $2.4 trillion.
The surge occurred as social media theories about Jane Street, a prominent trading firm, gained widespread attention. Market participants across Crypto X and Reddit had repeatedly identified a recurring trend where Bitcoin’s overnight price increases would evaporate within minutes after U.S. stock markets opened at approximately 10 a.m. Eastern Time.
Starting in early November, Bitcoin experienced price declines during the opening hour of U.S. trading sessions in over 60% of instances, frequently losing up to 3% during that timeframe. On Dec. 4, the cryptocurrency plummeted 2.1% within just 18 minutes while the S&P 500 remained unchanged.
The prevailing theory suggested Jane Street operated an automated trading algorithm that executed Bitcoin sales at 10 a.m. each day, stifling potential price rallies and facilitating repurchases at reduced price points.
Investigator “Bark” stated on X: “Jane Street was running an algorithm that dumped Bitcoin every single morning at 10am. Every day. For months. Crashing the price. Liquidating retail. Buying back lower. Rinse and repeat.”
Investor Mike Alfred amplified the narrative, asserting he had communicated with a Jane Street insider who confirmed management had directed an “immediate cessation” of the trading approach. Alfred claimed the “10 a.m. algo” had been discontinued. CCN attempted to contact both Alfred and Jane Street for verification but did not receive responses. These assertions remain unconfirmed.
Jane Street has rejected all accusations, characterizing them as “baseless.”
The Lawsuit Behind the Speculation
The intensified scrutiny comes after Terraform Labs’ bankruptcy administrator filed a lawsuit on Feb. 23. The 83-page legal document accuses Jane Street, co-founder Robert Granieri, and two staff members of insider trading and market manipulation preceding the 2022 TerraUSD catastrophe, which eliminated approximately $40 billion in market value.
The complaint alleges that confidential, privileged information from Terraform insiders was transmitted to Jane Street to facilitate front-running trades.
Bloomberg ETF analyst Eric Balchunas noted that if persistent selling pressure had ceased, Bitcoin might experience a durable recovery.
Technical Levels to Watch
Market analysts observed that Bitcoin’s RSI had recently approached 30, an oversold threshold typically linked with short-term corrective rallies.
Information from CoinMarketCap revealed a 95% correlation between Bitcoin and the S&P 500 during the 24-hour window, indicating broader market dynamics also influenced the movement. Wall Street advanced during that session as concerns surrounding AI technology subsided ahead of Nvidia’s earnings report.
Bitcoin reached an intraday peak of $69,819 before experiencing a pullback. Market analysts emphasize it must sustain levels above $64,000 and overcome resistance at $66,535 to preserve upward momentum. Failure to accomplish this could result in retesting support around $60,074.
Bitcoin had dipped below $63,000 earlier in the week and remains approximately 50% lower than its October all-time highs.
