Bitcoin Adds 120B After Jane Street Lawsuit Ends the 10 AM Dump Pattern: Analysis

Bitcoin and other major cryptocurrencies surged in value on Wednesday, with the total crypto market cap rising to nearly $2.5 trillion. The price rally coincided with the filing of a lawsuit against Jane Street, which traders suspect was behind a daily 10 a.m. sell-off pattern. Analysts attributed the shift to the allegations that Jane Street engaged in systematic trading behavior using non-public information. The lawsuit, filed by the administrator of Terraform Labs, accuses the firm of exploiting insider knowledge during the 2022 TerraUSD and Luna collapse.

The sudden disappearance of the 10 a.m. sell-off pattern sparked speculation that the lawsuit disrupted a consistent source of downward pressure on Bitcoin. Traders and analysts suggested that the firm may have used an algorithm to execute daily sales, contributing to price instability. The timing of the price rebound raised questions about whether the lawsuit neutralized this perceived selling pressure.

Experts have also highlighted the complex mechanics of Bitcoin ETFs, noting that demand and spot price movements are not always directly linked. The creation and redemption process in ETFs allows institutional middlemen to meet demand without forcing transactions on the public spot market. This dynamic can mute the price impact of ETF inflows, complicating the relationship between institutional activity and spot prices.

Why Did This Happen?

The lawsuit against Jane Street has reignited debates about institutional influence on crypto markets. The case centers on a key event in May 2022 when Terraform Labs made a large UST withdrawal from Curve’s 3pool. Minutes later, a wallet linked to Jane Street executed a significant UST sale into the same pool. This alleged trade is said to have accelerated the collapse of TerraUSD, leading to a $40 billion market loss.

Critics argue that large institutional market makers have the scale and liquidity access to influence short-term price movements, especially in thinner market conditions. The lawsuit has also revived online discussions about the role of institutional players in crypto markets.

How Did Markets React?

Bitcoin climbed to over $70,000 on Wednesday, adding more than $120 billion to its market capitalization. Ethereum and Solana also saw significant gains, with Ethereum rising more than 13% and Solana surging over 15%. Traders on social media platforms suggested the halt in daily selling had contributed to the price rebound. Analysts and traders speculated that the lawsuit had ended a long-standing source of downward pressure on Bitcoin.

The market reaction also reflected broader concerns about the role of stablecoins in maintaining liquidity. Tether, the largest stablecoin, is experiencing a second consecutive monthly contraction in market capitalization, indicating broader challenges for the crypto market recovery.

What Are Analysts Watching Next?

Analysts are monitoring whether the perceived selling pressure will continue to ease. The absence of public evidence confirming the algorithm used by Jane Street has led to ongoing debates about the role of institutional players in shaping market dynamics. Some traders believe the 10 a.m. sell-off pattern may return once regulatory scrutiny diminishes.

Regulatory developments in China and the UK are also under scrutiny. TD Securities analysts expect Premier Li to announce a 4.5–5.0% GDP target for 2026, with an accommodative fiscal policy aimed at boosting domestic demand. Meanwhile, Coinbase CEO Brian Armstrong expressed concerns over the Bank of England’s stablecoin caps, which could hinder the UK’s global financial competitiveness.

In the DeFi space, Uniswap's governance proposal to expand the fee switch mechanism has gained momentum, contributing to a 15% rise in the UNI token price. The change would allow protocol fees to be captured automatically for all new v3 pools, streamlining revenue collection and potentially improving Uniswap’s competitiveness.

The crypto market’s response to the Jane Street lawsuit underscores the ongoing debate about institutional influence and market dynamics. Traders and analysts are closely watching whether the shift in market behavior will lead to a sustained recovery.