TLDR
- Bitcoin experienced a ~7% rally amid theories that Jane Street discontinued a recurring morning sell algorithm following legal action
- An 83-page lawsuit was filed against Jane Street by Terraform Labs’ bankruptcy administrator on Feb. 23, citing insider trading allegations related to the 2022 TerraUSD collapse
- Bitcoin crossed the $68,000 threshold, contributing over $170 billion to the overall cryptocurrency market capitalization
- A recurring morning decline pattern affected Bitcoin during the opening hour of U.S. markets in more than 60% of trading sessions since early November
- Technical analysts emphasize Bitcoin must maintain levels above $64,000 and surpass $66,535 to continue upward momentum
Bitcoin delivered one of its most impressive daily performances of the year on Wednesday, climbing nearly 7% to surpass $68,000. This surge contributed more than $170 billion to the aggregate cryptocurrency market capitalization, elevating it to $2.4 trillion.
The price increase occurred as widespread discussion about trading firm Jane Street spread across social media platforms. Market participants on Crypto X and Reddit had observed a recurring phenomenon where Bitcoin’s overnight price increases would evaporate within minutes after U.S. equity markets opened around 10 a.m. Eastern Time.
Beginning in early November, Bitcoin experienced 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 dropped 2.1% within an 18-minute window while the S&P 500 opened without significant movement.
Market observers theorized that Jane Street operated an automated trading system that executed Bitcoin sales at 10 a.m. each day, creating downward pressure on potential price advances and enabling buybacks at reduced levels.
Investigator “Bark” posted 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, stating he had communicated with someone inside Jane Street who reported that management had directed an “immediate cessation” of the trading approach. Alfred indicated that the “10 a.m. algo” had been discontinued. CCN attempted to contact both Alfred and Jane Street but did receive responses. These assertions remain unconfirmed.
Jane Street has rejected all accusations, labeling them “baseless.”
The Lawsuit Behind the Speculation
The intensified attention follows legal action initiated Feb. 23 by the bankruptcy administrator representing Terraform Labs. The 83-page filing accuses Jane Street, co-founder Robert Granieri, and two staff members of insider trading and market manipulation preceding the 2022 TerraUSD collapse, an event that eliminated approximately $40 billion in market value.
The complaint asserts that confidential, non-public information from Terraform insiders reached Jane Street to enable front-running of trades.
Bloomberg ETF analyst Eric Balchunas suggested that the removal of persistent selling pressure could enable Bitcoin to experience a durable recovery.
Technical Levels to Watch
Market analysts observed Bitcoin’s RSI had recently approached 30, an oversold threshold frequently connected with short-term upward corrections.
Information from CoinMarketCap revealed a 95% correlation between Bitcoin and the S&P 500 during the 24-hour window, indicating broader market conditions also influenced price action. Wall Street posted gains during that session as concerns surrounding artificial intelligence subsided before Nvidia earnings.
Bitcoin reached a session peak of $69,819 before experiencing a pullback. Analysts indicate the cryptocurrency must sustain levels above $64,000 and overcome resistance at $66,535 to preserve upward trajectory. Failure to achieve these benchmarks could result in a retest of support around $60,074.
Bitcoin had dropped beneath $63,000 earlier during the week and continues to trade nearly 50% lower than its October record peaks.
