What's behind Bitcoin's surge today?
Bitcoin's price jumped more than 9% this week, reaching $69,000, amid cheers from traders who attributed the sudden rise to the disappearance of the so-called "10 AM smash" phenomenon that had been weighing on the market daily.
This shift came after a lawsuit was filed against Gain Street on February 24.
Todd Snider, court-appointed attorney for Terraform Labs, filed a lawsuit in Manhattan federal court against Gain Street Group, co-founder Robert Granieri, and employees including former Terraform intern Bryce Pratt and Michael Huang.
The lawsuit accuses the company of insider trading during the 2022 TerraUSD crash, a collapse that resulted in losses exceeding $40 billion.
The complaint alleges that Gain Street exploited undisclosed information about a 150 million UST withdrawal from the Curve3pool pool on May 7, 2022, and then a linked wallet withdrew 85 million UST minutes later, causing the loss of the dollar peg and triggering a "death spiral."
The market breathes a sigh of relief.
For weeks, traders had been observing strong, consistent sell-offs of Bitcoin around 10 a.m. New York time, linked to institutional algorithms targeting long leveraged positions.
But since the lawsuit was filed, this phenomenon has disappeared, and Bitcoin has jumped 9.2%, moving in tandem with US stocks in a wave of increased risk appetite.
One trader wrote on the X platform: "When the pressure stops... the price finds out the truth."
Gain Street's response:
The company described the lawsuit as a "desperate attempt to drain funds" and "baseless allegations," asserting that the losses suffered by Terra and Luna holders were due to a "billion-dollar fraud perpetrated by Terraform management," and vowed to vigorously defend itself.
