Today's article is considered a popular science piece. Uncle Meow actually observed this phenomenon a long time ago. Since early November 2024, the trend of Bitcoin's sharp decline at the opening has repeatedly appeared, such as erasing 16 hours of gains within 20 minutes last night, and similar patterns are expected in the second and third quarters of 2025. Therefore, this is not an isolated incident but reflects the deep integration of the cryptocurrency market with the traditional financial system (mainly U.S. stocks) and the actions of high-frequency trading (HFT) firms driven by liquidity.
Why is Bitcoin especially weak during the opening period?
First, we need to understand that the intraday fluctuations of Bitcoin's price are often closely related to the global liquidity rotation. The opening of the U.S. stock market (ET 10:00) marks the start of the largest trading session globally, during which the overnight gains in Asian and European markets (usually based on low liquidity speculation) face the 'real' U.S. stock capital's scrutiny.
If liquidity mismatch occurs, then before the opening, BTC often rises slightly during the Asia/Europe session, but with low trading volume (average daily spot trading volume around $50-80 billion). After the opening, related ETFs (like Bitcoin spot ETF) and derivative markets flood in trillions of dollars of liquidity, causing prices to quickly 'calibrate'. If overnight long positions are overly leveraged (such as perpetual contracts), even small sell orders can trigger a chain liquidation.
For instance, based on on-chain and exchange data, since November 2025, the average decline of BTC within the first hour after opening has reached 1.5%-3%, with liquidation scale around $500-1,000 million. This is similar to the 'gap down' at the opening of traditional assets (like U.S. stocks), but the 24/7 nature of the crypto market amplifies the effect. However, after a crash, the price of Bitcoin can slowly recover, forming a 'V'-shaped recovery, indicating non-persistent selling pressure, but rather short-term liquidity 'sweeping'.
So, from a macro perspective, the crypto market is indeed not mature enough, even though BTC's correlation with the Nasdaq index has exceeded 0.7 (2025 data), but the opening period still becomes a window for 'risk premium' release, and moreover, Bitcoin is increasingly affected by expectations of Federal Reserve policy, U.S. stock earnings season, etc.
HFT Role and Manipulation
@zerohedge has previously pointed out multiple times that high-frequency trading institutions manipulate prices on a small scale. Among them, Jane Street is regarded as the prime suspect, as this company, being a top global quantitative trading giant (with trading revenue exceeding $10 billion in 2024), dominates the U.S. stock, ETF, and crypto market making fields.
Moreover, their holdings in Bitcoin ETFs are massive. As of December 2025, Jane Street held approximately $2.5 billion worth of BlackRock's IBIT Bitcoin ETF shares (its fifth-largest holding), with total assets under management (AUM) far exceeding this amount.
Their operational path (inferred from trading footprints, not conclusive evidence):
Opening Sell-off: Utilizing HFT algorithms to release sell orders at the moment of opening, targeting liquidity 'pools' (such as stop-loss orders on Coinbase Prime), quickly pushing down prices by 2%-5%. This is similar to 'momentum ignition', triggering retail/leverage long liquidations.
Liquidity Push: Prices drop to support levels (such as the $105,000-$108,000 range in October), sweeping out residual positions in Asia/Europe.
Low Position Buyback: Rebuilding positions through OTC or ETF channels, accumulating spot BTC. Repeated execution forms a daily 'pump-dump-absorb' cycle.
Scale Effect: Jane Street's share in crypto market making accounts for 10%-15% of the market, with algorithms capable of influencing volatility on a minute-level, rather than relying on macro news. This behavior aligns with the HFT 'arbitrage-accumulation' logic: not pure manipulation, but utilizing regulatory gray areas (such as the SEC's leniency on ETF market making) for 'liquidity engineering'. Similar cases are common in traditional markets (like the $4.8 billion fine by SEBI against Jane Street for derivatives manipulation in India in 2025), but crypto regulation is lagging (CFTC/SEC has not yet intervened in BTC spot).
Macro Impact
Recently, retail liquidations exceeded $70 billion (2025 Q4 data), but did not change the long-term upward trend of BTC (annualized return still above 50%). This reinforces BTC's narrative as 'digital gold', but exposes its dependence on traditional finance. Moreover, the recent 'large players' accumulation window may close in Q1 2026, with current net inflows into ETFs like IBIT exceeding $50 billion. Once Jane Street's positions are saturated, selling pressure will shift to buying. Macro catalysts include the loosening of crypto policies under the Trump administration (already evident in 2025) and the Federal Reserve's interest rate cut cycle. In the future, if patterns break, BTC will return to a monthly bullish trend, with target price levels of $120,000-$150,000.
