Bitcoin's 10 AM Dump: Flow Data vs. Viral Theory

The viral "10 a.m. dump" theory lacks consistent flow evidence. For months, traders observed a pattern where Bitcoin declined in the first hour of U.S. trading, with Bitcoin declining during the first hour of U.S. trading in more than 60% of sessions since early November. This created a predictable headwind, often erasing overnight gains within minutes of the New York open. The narrative gained traction as a simple explanation for stalled rallies.

The pattern broke this week. Instead of selling, Bitcoin surged over 4% on Tuesday, climbing past $68,000 and triggering a short squeeze. This sudden absence of selling became a major talking point, with speculation quickly centering on Jane Street. The firm's X account activity, which appeared blank, added fuel to the fire, with traders noting the timing alongside the disappearance of the dump.

The immediate catalyst for the surge is unverified but widely discussed. Online speculation claims that Jane Street halted a suspected algorithm, with investor Mike Alfred alleging management ordered an immediate cessation of manipulative trading. While the firm has not confirmed this, the narrative that a key source of selling pressure has stopped is driving the price move.

Flow Evidence Against Centralized Manipulation

The theory that a single firm can control Bitcoin's price is contradicted by the flow data. Market analysis shows no consistent 10 a.m. bitcoin dump and that price moves more closely mirror broader Nasdaq risk repricing. This suggests the alleged pattern was a misreading of systemic market dynamics, not targeted manipulation.

Jane Street's role as an ETF Authorized Participant is one of arbitrage, not systematic dumping. Their function involves buying and selling ETF shares to maintain a price close to the underlying Bitcoin spot value. This activity is a normal part of the ETF structure and does not constitute the kind of coordinated selling needed to drive a 40% price decline.

A more obvious driver of the bear market is the collapse in Bitcoin spot demand since early October 2025. This fundamental shift in buying pressure is a far more plausible explanation for the sustained price weakness than any single firm's actions. The focus on Jane Street distracts from this larger, more significant flow issue.

Catalysts, Risks, and What to Watch

The key catalyst for a structural recovery is sustained price action above the $74,000 level. A single strong day is not enough; the market needs to reclaim and hold this psychological and technical barrier for several weeks to confirm a shift from a speculative bounce to a genuine trend change. Until then, all other narratives remain noise.

The major risk is regulatory scrutiny stemming from the lawsuit. The Terraform Labs estate's suit has drawn public attention to Jane Street's role, potentially triggering broader regulatory questions about the ETF structure and market-making practices. This could lead to new rules that alter how authorized participants operate, introducing uncertainty into the flow of institutional capital.

For now, the most critical data to watch is spot Bitcoin ETF flows. The market is nearing a potential first week of inflows after five consecutive weeks of net outflows totaling $3.8 billion. Recent daily inflows of over $500 million suggest a possible reversal in demand, but the trend must continue to validate a bottom.