Bitcoin Surges Past $86,000 as Short Squeeze and ETF Inflows Fuel Rally
Bitcoin (BTC) surged past $86,000 on October 5, marking a 0.91% increase in 24 hours and a trading volume jump of 88.06% to $23.49 billion, according to CoinMarketCap. The rally was fueled by a mix of factors, including a short squeeze, sustained inflows into spot Bitcoin ETFs, and renewed institutional buying.
A short squeeze played a significant role in the price climb, with $60.11 million in short positions liquidated over 24 hours, accounting for 82% of all Bitcoin liquidations. This forced buying pushed the price higher, though traders noted resistance near $87,000 and support around $85,000.
Spot Bitcoin ETFs continued to attract investors, with net inflows of $241 million from September 28 to October 2. In contrast, Ethereum spot ETFs saw outflows, particularly from Fidelity's FETH, which recorded $74.06 million in withdrawals. Institutional buyers, including treasury firms and Metaplanet, also contributed to the rally. Metaplanet, for instance, acquired $85.9 million worth of BTC, expanding its holdings to 44,000 coins by September 30.
Looking ahead, the Federal Reserve's FOMC minutes scheduled for October 7 could influence Bitcoin's trajectory. A hawkish tone might pressure BTC, while a patient approach could support risk assets. Additionally, Bitcoin's historical October performance, known as 'Uptober,' suggests potential gains, though past trends do not guarantee future results. The market will closely watch whether BTC maintains its position above $85,000 post-minutes and if ETF inflows persist.