Bitcoin holds firm as ETF inflows continue: analysts assess rally’s strength

Bitcoin (BTC) rose slightly on Wednesday as investors assessed whether its strong third-quarter rally could extend amid a sharp slowdown in speculative futures demand and increased profit-taking.

Bitcoin gained 0.4% to above $83,400 during Asian trading hours, remaining below its eight-month high of around $87,400 hit earlier this month.

The broader cryptocurrency market was valued at roughly $2.95 trillion, up 0.3% over the previous 24 hours.

The rally is now facing a key test of whether fresh demand can offset a sharp cooling in speculative activity.

Futures demand growth drops 90%

Growth in speculative futures demand fell from around 164,000 BTC on September 14 to just 16,000 BTC on September 29, a 90% decline in 15 days, according to CryptoQuant.

At the same time, recent Bitcoin buyers are sitting on an average unrealized gain of 33%, the highest level since December 2024.

That profitability has already encouraged investors to lock in gains.

Bitcoin holders realized profits on around 25,700 BTC on September 22, the largest single-day total of the year.

“Without fresh demand, rallies struggle to extend,” Julio Moreno, head of research at CryptoQuant, wrote in a report.

“With spot demand still in contraction and futures growth stalling, near-term upside becomes harder to sustain.”

The combination suggests Bitcoin’s recent advance could become increasingly dependent on fresh spot demand rather than leverage-driven futures activity.

Bitcoin remains resilient despite macro pressure

The cooling in derivatives demand comes against a difficult macro backdrop.

US Treasury yields have continued to rise, oil prices remain above $100 a barrel amid the US-Iran impasse, and markets are pricing in the possibility of further interest-rate increases.

Yet Bitcoin has so far remained relatively resilient.

“The macro backdrop has continued to weigh on risk sentiment at the start of the week as the selloff in US Treasuries deepens, oil prices remain above $100 a barrel amidst the US-Iran impasse, and continued market expectations for further interest rate hikes to come,” Thahbib Rahman, Research Analyst at Block Scholes, said.

“Despite the macro hurdles (and sector-specific headwinds such as the US Senate’s recent failure to advance the Clarity Act), Bitcoin (BTC) has remained incredibly resilient,” the analyst told Invezz.

Rahman noted that Bitcoin has traded within a tight range of roughly $82,000 to $84,000 over the past week and a half, even as institutional demand has continued to provide support.

“Spot BTC ETFs (Exchange Traded Funds) have now recorded eight consecutive sessions of inflows, totalling around $3 billion,” he added.

The resilience is notable given the sharp slowdown in speculative futures growth.

It suggests that institutional spot demand may be helping offset some of the leverage that previously supported Bitcoin’s momentum.

ETF demand remains supportive

Institutional demand has provided an important counterweight to the cooling derivatives market.

US spot Bitcoin ETFs recorded around $2.4 billion in net inflows during the week ended September 25.

The buying continued into the latest week. On September 29, US spot Bitcoin ETFs recorded more than $66 million of inflows, extending their streak to nine consecutive sessions.

That institutional support is becoming increasingly important as speculative futures activity stalls.

“The balance of evidence points to a recovery that is increasingly supported by institutional demand, but confirmation depends on persistence rather than the size of the initial move,” Sonali Gupta, Research Lead at AMINA Bank, said.

Gupta said Bitcoin’s ability to remain above the $83,000-$86,000 range while ETF inflows remain positive is an important signal for the market.

“That combination would provide stronger evidence that the September rally is developing into a broader recovery,” she added in a note shared with Invezz.

“Conversely, a reversal in ETF flows alongside a sustained move below this range would weaken the case.”

Gupta also highlighted the growing importance of the broader macro environment, particularly elevated long-term government bond yields and continued demand for gold from Chinese central banks.

The contrasting signals leave the cryptocurrency at an important point in its rally.

ETF demand remains supportive, while the sharp decline in speculative futures growth and elevated unrealized profits suggest that some investors are increasingly taking money off the table.

PCE inflation in focus

Traders are also awaiting the latest US inflation reading later Wednesday for clues about the Federal Reserve’s next interest-rate decision.

A stronger-than-expected reading could increase expectations for higher interest rates, supporting the dollar and potentially weighing on risk-sensitive assets such as Bitcoin.

Conversely, softer inflation could reduce expectations for further monetary tightening and provide a more favorable backdrop for cryptocurrencies.

That macro backdrop comes as Bitcoin heads toward one of its strongest quarters in recent years.

Bitcoin is up more than 43% in the third quarter, putting it on course for its strongest quarterly performance since the fourth quarter of 2024.

It would also rank among Bitcoin’s strongest quarterly gains since US spot Bitcoin ETFs began trading in January 2024.

The post Bitcoin holds firm as ETF inflows continue: analysts assess rally’s strength appeared first on Invezz