Bitcoin Rebounds as '10 a.m.' Routine Sell-Off Halts... Have Market Manipulators Surrendered?

▲ Bitcoin (BTC)

Bitcoin (BTC) successfully staged a massive rebound accompanied by a powerful short squeeze after routine selling pressure at a specific time of day, which had weighed on the market for months, abruptly halted in the wake of a legal dispute.

According to crypto media outlet CoinGape on February 26 (local time), Bitcoin surged from around $63,000 to near $70,000 as the previously observed pattern of routine selling at 10 a.m. disappeared. The shift came shortly after news broke that the bankruptcy trustee of Terraform Labs had filed a lawsuit against a major Wall Street market maker. The firm is accused of using insider information to generate illicit profits during the 2022 Terra and Luna collapse, and it is suspected that it may have suspended its existing trading algorithms amid the legal proceedings.

Market participants had expressed frustration since last October over large-scale, mechanical sell orders that consistently emerged at 10 a.m., the opening hour of U.S. markets, pushing prices lower. However, for the first time since the lawsuit was filed, no selling pressure was detected at that time. Instead, strong buying interest flowed in, reversing market sentiment. Experts say the halt of algorithmic selling by a specific institution acted as a decisive catalyst, unleashing pent-up demand and fueling the rally.

Bitcoin’s sharp upward movement triggered a record short squeeze, forcing investors who had bet on price declines to capitulate. Over the past 24 hours, total liquidations in the digital asset market reached $585 million, with short positions accounting for about 81%, or $473 million. The buying pressure generated from large-scale short liquidations and position covering created a virtuous cycle that drove prices even higher, allowing Bitcoin to quickly recover to levels threatening the $70,000 mark.

Technical indicators are also signaling positive momentum. Bitcoin has broken through and is attempting to hold above the key psychological resistance level of $66,000, while major indicators such as the Moving Average Convergence Divergence (MACD) have exited bearish territory and entered a recovery phase.

As perceptions spread that artificial price suppression factors have dissipated, investor sentiment has improved sharply. Market capitalization increased by approximately $170 billion in a single day, lifting the total cryptocurrency market size to around $2.5 trillion.

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