Bitcoin's climb from roughly $63,500 to above $80,000 leaned on spot ETF buying and short covering rather than fresh leveraged bets, QCP Capital said on Aug. 28. Spot funds have since posted their first outflow in nine sessions, and above-target inflation keeps markets pricing a possible September rate increase.
Bitcoin's advance from about $63,500 to above $80,000 drew mainly on spot buying rather than new leveraged positions, QCP Capital said on Aug. 28. The trading firm pointed to two moving parts behind the rally: growing ETF demand and shrinking futures leverage.
ETF inflows outpaced leveraged positioning
QCP estimated that U.S. spot Bitcoin ETFs attracted roughly $2.8 billion across eight consecutive sessions during the rally. Meanwhile, BTC futures open interest fell from about 646,000 BTC to 588,000 BTC as prices climbed. That combination suggests spot purchases and short covering, not aggressive new leverage, pushed the move. According to QCP: "short covering and spot demand have played a larger role than fresh leveraged longs".
Outflows test the spot-demand thesis
However, the thesis faced its first real test on Aug. 28, when U.S. spot Bitcoin ETFs recorded $201.9 million in net withdrawals, ending nine consecutive inflow sessions. Still, the funds collected approximately $924.5 million over the Aug. 24-28 trading week overall. Bitcoin subsequently traded near $77,500 on Aug. 29 after falling about 2.9% over 24 hours, following a failed attempt to hold above $80,000. As of the latest update, Bitcoin traded near $78,127, up 0.64%, consolidating between its shorter- and longer-term moving averages.
Inflation keeps the Fed cautious
The inflation backdrop remains a constraint. July headline PCE inflation rose 3.7% annually, while core PCE held at 3.3%, keeping both measures above the Fed's target and limiting room to ease policy. Markets had assigned an estimated 35% probability to a 25-basis-point September rate increase before Fed Chair Kevin Warsh's Aug. 28 Jackson Hole address. Higher rate expectations could pressure Bitcoin by strengthening the dollar and lifting yields on lower-risk assets.
Treasury buybacks add liquidity, not stimulus
Separately, the U.S. Treasury will increase its long-end liquidity-support buybacks from a maximum of $2 billion to at least $4 billion per operation starting Sept. 9. The program aims to improve trading liquidity in older Treasury securities and does not constitute Federal Reserve quantitative easing. For Bitcoin, the next test is whether ETF demand returns while futures leverage stays contained.
Sources: crypto.news, Cryptocurrency News
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