Bitcoin Bounces Back from $75K Low with Institutional Demand Boost
Bitcoin's recent price action has been marked by a striking rebound from $75,000 to near $80,000 in just a few days. The recovery is all the more remarkable given that it occurred despite a 25-basis-point interest rate hike by the Federal Reserve and the failure of the Senate to advance the CLARITY Act, which initially sparked a selloff.
One key factor behind this turnaround was the reversal in institutional demand for U.S. spot Bitcoin ETFs. On September 17, these funds saw $159.5 million in net inflows, according to TFTC's ETF flow tracker, with BlackRock's IBIT alone attracting $183.7 million.
Despite heavy ETF withdrawals just two days prior, totaling $746 million, Bitcoin held steady around $76,000. This suggests that much of the immediate selling pressure was absorbed by other market participants.
The Senate's CLARITY Act setback and the Fed rate hike initially looked bearish for Bitcoin. However, markets may be concluding that the absence of legislation does not preclude continued development of regulatory rules by federal agencies.