Bitcoin Jumps 3.1% to $79,739 as ETF Inflows Return
Key Points
- Bitcoin rose 3.1% to $79,739 on Tuesday, extending a rally that began last week with a 20% three-day gain.
- U.S. spot bitcoin ETFs attracted $1.92 billion in net inflows last week, their largest weekly total since October.
- More than $4 billion in bearish crypto positions were liquidated as prices rose, fueling the short squeeze.
Institutional investors have resumed buying. U.S. spot bitcoin exchange-traded funds attracted $1.92 billion in net inflows last week, their largest weekly haul since October, when bitcoin reached its previous cycle peak. The rally followed the U.S. Treasury's announcement that it would double its purchases of longer-dated government bonds, a move that briefly pushed yields lower and revived demand for risk assets while growing concern over inflation and government debt boosted interest in assets perceived as scarce.
Fundstrat research noted that strong inflows into bitcoin and ether ETFs, increased trading volume, and the creation of more stablecoins—which investors often use to buy cryptocurrencies—suggest the rally may be more durable than a tactical bounce. The research firm highlighted that activity in the options market indicates investors are becoming more confident the rally can last. Unlike earlier rebounds when traders mainly bet on short-term price gains, investors are now paying for exposure to bitcoin gains further into the future.
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Analysts have cautioned that bitcoin faces headwinds. BTIG noted that a similar surge in January 2023 initially faded before the cryptocurrency found support around its 200-day moving average. Bitcoin had been in a prolonged slump since October before last week's breakout.
Strategy, the world's largest corporate holder of bitcoin, has not purchased the asset for two weeks. If the company resumes buying while ETF demand remains strong, analysts say that could provide another boost to prices.
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Why this matters: The return of institutional ETF inflows at their highest level in three months signals that large investors believe the rally has fundamental support rather than being driven purely by technical factors or sentiment. This distinction matters for retail traders deciding whether to participate in the current move.
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Market Outlook
Bitcoin may face resistance in the $80,000-$82,000 range before consolidating. If Strategy and other large holders resume purchases while spot ETF inflows remain above $1 billion weekly, sustained momentum toward previous resistance levels becomes more likely. However, any deterioration in risk sentiment or unwinding of the short squeeze could quickly reverse gains.
Sources: CNBC and other international news outlets.
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