Bitcoin has exceeded $87,000 for the first time since January, driven by nearly $1 billion in ETF inflows, with analysts eyeing further growth.
Bitcoin has surpassed the $87,000 threshold for the first time since January, fueled by substantial inflows into U.S. spot Bitcoin exchange-traded funds (ETFs). On September 21, these ETFs collectively attracted close to $1 billion, with a reported total of $999 million, according to SoSoValue.
Leading the inflows was BlackRock's IBIT with $381.4 million, while Ark Invest's ARKB and 21Shares followed at $289.1 million, and Fidelity's FBTC at $238.8 million. Additional contributions came from MSBT with $61.7 million and BITB with $21.6 million.
At the time of reporting, the price of Bitcoin was hovering around $85,500, having recently peaked at $87,329 within a 24-hour span.
Increased Buying Activity
The uptick in ETF investments was paralleled by a rise in buying activity across cryptocurrency markets. Analysts at Glassnode noted a shift in trends, observing more buying than selling among market participants, alongside an uptick in trading volume and the liquidation of short positions.
"Bitcoin touches $86k, up more than 10% from last Sunday’s close. Spot and perpetual buyers lead while leverage and profit-taking slowly rise with price. ETF flows are the one reading still pointing the other way." — glassnode
This increase in capital inflow is also reflected in the monthly change in realized capitalization, which has surged above typical levels, indicating fresh capital entering the market at higher price points. About two-thirds of Bitcoin’s total supply is currently profitable, according to the analysis.
Wintermute reported that Bitcoin's price closing above the 50-week moving average last week marks a significant technical shift, suggesting a sustained recovery from June's lows.
Rising Leverage and Market Sentiment
As momentum grew, traders began amplifying their leveraged positions. Data from Coinalyze showed that open interest in Bitcoin futures reached $30.5 billion, marking a 5.5% rise in just one day, mostly concentrated in perpetual contracts.
Glassnode observed heightened open interest levels and funding rates in futures, while options activity also surged, nearing $41 billion, indicating an increase in realized profits. This situation creates complexity, as while genuine purchases are boosting prices, the increase in leverage also introduces sensitivity to fluctuations in spot demand.
Wintermute pointed out positive sentiment in the options market, reflecting increased interest in long-dated call options for the end of the year. Some market participants are already speculating on a return to Bitcoin’s all-time high of $126,000, although experts caution that this may be premature.
Future Price Targets and Risks
Nikolai Sondergaard, a senior analyst at Nansen, identified $90,000 as the next key price target for Bitcoin, highlighting that rapid price movements may outpace traders’ ability to adjust their positions. Sustained demand for spot purchases and ETF inflows will be essential for ongoing price growth. Additionally, external risks such as rising U.S. government bond yields and geopolitical tensions could impact market dynamics.
In a related note, JPMorgan analysts recently observed that a dip in demand for hedging via Bitcoin ETFs might provide stronger support for Bitcoin than gold, signaling potential shifts in investor sentiment.
