Bitcoin (BTC) Price Manipulation Claims Resurface as Analysts Eye Eventual Breakout

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.

Technical analyst James CryptoGuru shared his theory on Jan. 10, suggesting that Bitcoin spot exchange-traded funds (ETFs) are being used by large entities to “liquidate” traders. However, this approach carries significant risk and is not always effective due to the unpredictable nature of crypto markets.

While some analysts and rumors point to large-order executions and privileged access to liquidation levels, there is no evidence of illegal activity. Even if some players have an advantage, strong incentives exist for them to front-run each other rather than act collectively.

Moreover, even large-scale coordination does not guarantee successful market manipulation, especially with cryptocurrencies like Bitcoin, Ether, and XRP not being classified as securities.

In traditional markets, a handful of large fund managers like Vanguard, BlackRock, and Capital Group can easily influence markets with their trades, thanks to the massive assets they manage.

For instance, in 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.

On the other hand, some theories also suggest that Binance plays a role in these large-scale price drops, either as a participant or the mastermind behind seemingly coordinated drops across multiple assets.

According to Jamyies, 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.

This approach becomes especially relevant during weekends and overnight sessions when traditional financial markets are closed. As a result, large-order executions in cryptocurrencies can have a magnified impact during these periods.

However, it’s crucial to note that Bitcoin’s price movements during these 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.

To further complicate matters, some analysts like “Vincent Van Code” attribute cryptocurrency price crashes to “whale chat groups” using “sophisticated bots” and “war chests” exceeding $100 million.

These rumors cannot be entirely dismissed, but there is no way to confirm whether large entities collaborate or if Binance has direct ties to any market maker.

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.

In traditional markets, firms like Vanguard, BlackRock, Fidelity, and Capital Group heavily influence markets, controlling 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.

For instance, Vanguard, the world’s second-largest asset manager, is known for its low-cost index funds, which have made it a favorite among retirement savers. As of June 2024, Vanguard manages over $8.9 trillion in assets, making it one of the most powerful players in the financial markets.

Another example is BlackRock, the world’s largest asset manager with over $10.6 trillion in assets under management. The firm is known for its active management style and its large positions in technology stocks.

Meanwhile, 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 turn, this creates opportunities for traders to use automated trading strategies that follow the lead of Bitcoin.

Similarly, 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.

Finally, Bitcoin’s price is expected to eventually break out of its tight range of $95,500 to $98,000, where it has been consolidating since Feb. 5,