The recent admission by former Alameda Research CEO Caroline Ellison that FTX founder Sam Bankman-Fried instructed her to sell Bitcoin if its price stayed above $20,000 sent shockwaves through the crypto industry. However, a closer examination of FTX's Bitcoin reserves reveals their limited capacity to manipulate the Bitcoin market for any significant period.

At its peak in September 2022, FTX held less than 47,000 Bitcoin in its reserves according to Glassnode. Even if Alameda Research sold 25% of that total in a single day, the $240 million would only represent around 7% of the daily Bitcoin volume across major exchanges.

For comparison, MicroStrategy's $190 million Bitcoin purchase in March 2022 equating to 4,167 BTC only briefly suppressed Bitcoin's price for a couple days before it continued its upward trajectory. Meanwhile, giants like Binance and Coinbase held over 623,000 and 690,000 BTC respectively - almost 28 times more than FTX.

Given FTX's falsified trading data and relatively tiny Bitcoin holdings compared to the broader market, any price suppression attempts likely had negligible effects beyond a few days. Basic supply and demand economics indicate FTX lacked the reserves to significantly manipulate Bitcoin's price for any extended period.

While Ellison's admission raises concerns, traders should analyze the numbers behind the claims. Despite speculation, FTX's limited Bitcoin firepower meant large-scale price suppression was improbable. Minor short-term effects do not prove market manipulation capabilities.

Ultimately, Bitcoin's price reflects millions of buyers and sellers worldwide. No single entity, even large exchanges, can unilaterally control market prices for long. FTX's collapse dealt a blow to crypto, but Bitcoin remains resilient in the face of external forces trying to dictate its value.