Bitcoin (BTC) has struggled to hold above $98,000 since Feb. 6, prompting investors to speculate on the lack of bullish momentum. While some analysts claim Bitcoin’s price is being “manipulated,” the reality is that multiple factors shape trader sentiment, including regulatory developments and global economic conditions.
Technical analyst James CryptoGuru warned his followers on Jan. 10 about “massive market manipulation in crypto,” alleging that Bitcoin spot exchange-traded funds (ETFs) were being used to “liquidate” traders by applying downward pressure on the asset’s price while traditional financial markets remained closed.
Source: JamyiesUnder this assumption, these entities would drive Bitcoin’s spot price lower to liquidate leveraged buyers—traders using derivative instruments like BTC futures. This strategy creates temporary market disruptions, accelerating the downside move while these so-called “manipulators” accumulate Bitcoin and Ether at discounted prices.
Large-order executions in cryptocurrencies are not illegal
While plausible, this approach carries significant risk, as Bitcoin’s price movements during weekends and overnight sessions do not always align with trends once US markets open. A constant flow of news and data can shift investor sentiment, making large orders impactful in the short term but offering no guarantee that the effect will last beyond a few minutes or hours.
Other analysts, such as “Vincent Van Code,” attribute cryptocurrency price crashes to “whale chat groups” using “sophisticated bots” and “war chests” exceeding $100 million. Some theories even suggest that Binance plays a role, either as a participant or mastermind behind seemingly coordinated price drops across multiple assets, including Bitcoin and XRP (XRP).
Source: vincent_vancodeWhile these rumors are entirely unproven, they cannot be ruled out. There is no way to confirm whether large entities collaborate or if Binance has direct ties to any market maker. However, even if some players have privileged access to liquidation levels and hidden orders on exchanges, strong incentives exist for them to front-run each other rather than act collectively.
Even if a group is coordinating large order executions without special exchange access, there is nothing illegal about it—especially considering that cryptocurrencies like Bitcoin, Ether, and XRP are not classified as securities. The same logic applies to a single fund manager holding a $100 million position in crypto.
Vanguard, BlackRock, Fidelity, and Capital Group heavily influence markets
In traditional markets, firms like Vanguard, BlackRock, Fidelity, and Capital Group control 57% of open-end mutual funds and ETFs, according to Morningstar. With a combined $29 trillion in assets under management, their trades can easily influence markets across stocks, bonds, and commodities.
Source: Ken Paxton, Texas Attorney GeneralIn November 2024, Texas Attorney General Ken Paxton filed a lawsuit against some of the world’s largest fund managers, accusing them of manipulating energy prices through a “cartel to rig the coal market.” Similarly, in October 2024, the US broker unit of Toronto-Dominion Bank agreed to pay over $20 million to settle allegations of manipulating the US Treasurys market.
Regarding claims that bots are used to “operate across multiple tokens,” this is entirely accurate. Bitcoin continues to dominate the market with a 64% share (excluding stablecoins), which keeps its correlation with altcoin prices extremely high. As a result, most market makers and arbitrage desks adjust their altcoin positions based on Bitcoin’s price movements.
In a similar manner, price movements in major tech companies like Microsoft and Nvidia often influence the broader tech sector. In the absence of specific news or events, traders tend to follow the lead of sector leaders, with automated trading strategies and bots typically being the first to react. Therefore, the fact that the entire cryptocurrency market often moves in sync is not particularly unusual.
The price of Bitcoin is expected to eventually break out of its tight range of $95,500 to $98,000, where it has been consolidating since Feb. 5, and altcoins are likely to follow the trend. However, the significant $35 million aggregate order book depth for Bitcoin spot trading on major exchanges like Binance and Coinbase makes it difficult for market manipulation to occur.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
