Spot Buying Fuels Bitcoin Rally as ETF Inflows Slow

Bitcoin's rapid ascent to above $80,000 was largely driven by spot buying and short covering rather than fresh leveraged positions, according to QCP Capital.

The trading firm attributed the surge in part to the influx of $2.8 billion into U.S. spot Bitcoin exchange-traded funds (ETFs) over eight consecutive sessions, with futures open interest falling from around 646,000 BTC to 588,000 BTC.

This combination suggests that short covering and spot demand played a larger role than fresh leveraged longs chasing the move, QCP said. However, the latest ETF data introduced a test of this thesis, as U.S. spot Bitcoin ETFs recorded $201.9 million in net withdrawals on August 28.