Bitcoin Sustains Rally Despite Higher Inflation Odds as $2B Cash Surge Absorbs Speculative Leverage
The recent resilience of Bitcoin's price can be attributed to a significant surge in cash inflows that wiped out speculative leverage, according to data from Glassnode. The $2 billion influx into US-traded spot Bitcoin ETFs absorbed the initial squeeze, with no single outflow day and the strongest seven-day intake of 2026. This demand was not limited to institutional investors, as Farside Investors' daily tracker shows another $314.3 million of inflows on August 25 alone.
Despite the Federal Reserve's July PCE inflation reading holding at 3.7% headline and 3.3% core, futures markets responded by pushing the odds of a September rate hike to roughly 44%, up from 36%. However, Bitget Research chief analyst Ryan Lee expects Bitcoin's price to keep taking its direction from elsewhere, in ETF flows, spot liquidity, and derivatives positioning.
Furthermore, Glassnode data shows that futures open interest fell 11% during the late-August squeeze, while perpetual funding stayed mostly positive. This suggests that a rally built entirely on forced buying would have left a visible trace in the futures market, which is not the case here.