Bitcoin sees big overnight rally as ETF demand returns before the next US jobs test

By the morning of Oct. 2, Bitcoin climbed back above $86,000 as US spot Bitcoin ETF demand rebounded, with short covering likely helping accelerate the upward momentum ahead of the US jobs report.

At 08:40 UTC, Bitcoin changed hands at $86,325.44, marking a 24-hour gain of 3.67%. This push lifted the cryptocurrency past its Sept. 30 recovery above $85,000, which had previously dropped back below $84,000 following US inflation figures.

The turnaround in exchange-traded funds gives this recovery backing that goes beyond leveraged traders simply closing out bearish positions. Documented short liquidations provide a mechanism to speed up an already progressing move. While the initial catalyst is not entirely clear because rolling liquidation data and daily fund flows track different timeframes, the combined indicators point toward a mix of fresh buying interest and forced short exits.

Data from Coinbase’s BTC-USD market highlighted the scale of the price action: by 08:42 UTC, its 24-hour rolling window spanned from $83,353.87 to $86,885.28, with the latest trade registering at $86,377.70. Cryptoslate’s market rankings also showed gains for Ether, XRP, and Solana, indicating that Bitcoin’s rebound was part of a wider rally across top cryptocurrencies.

ETF demand returned after an outflow day

On Oct. 1, US spot Bitcoin ETFs brought in $102.7 million in net inflows, according to flow data from Farside Investors. That figure followed a session of net outflows.

This positive net total masked a mixed performance among individual funds. BlackRock’s IBIT fund drew investments even while Fidelity’s FBTC fund alongside multiple other ETFs saw redemptions. Overall demand rebounded because total inflows outpaced those withdrawals.

The bounce back to net inflows reduces the likelihood that the previous session’s redemptions signaled the beginning of a prolonged capital flight. Sustained inflows would make this support sturdier, though outflows at competing funds emphasize that a single day of positive totals is still a restrained indicator of overall investor commitment.

Leverage could amplify an existing rise

CoinGlass figures for Bitcoin trading indicated roughly $70.58 billion in 24-hour Bitcoin futures turnover at the 08:42 UTC check, contrasting with about $6.35 billion in spot turnover across monitored markets. The platform also noted roughly $135.47 million worth of liquidated Bitcoin futures positions.

While turnover gauges trading volume and accounts for repeated transactions, these statistics point to heavy derivatives involvement rather than newly injected capital reaching Bitcoin.

In its Oct. 2 assessment of 24-hour Bitcoin futures liquidations, CoinNess noted that 91.13% consisted of short positions. Such an imbalance aligns with forced closures of bearish bets helping to push an upward-moving market faster.

When Bitcoin climbs, mounting losses on leveraged short bets can deplete their backing collateral. Winding down these positions introduces extra buying demand, forming a loop that lets a rally gain momentum.

Forced liquidations can drive a rapid price surge, though that impact wanes once vulnerable positions are cleared out, leaving sustained organic buying responsible for maintaining higher valuations.

Inflation and payrolls still test the recovery

Inflation continues to present a hurdle for the market recovery, even if the Federal Reserve takes extra time to evaluate its upcoming steps.

The August Personal Consumption Expenditures (PCE) report published on Sept. 30 pegged core inflation at 0.2% month-over-month and 3.0% year-over-year, while headline inflation registered at 0.3% monthly and 3.4% annually. Published two days prior, those metrics set the stage for the recent overnight price increase.

On Oct. 1, Fed Vice Chair Philip Jefferson stated that evaluating future policy adjustments might demand additional time. His comments leave room for patience, though he also pointed out upside risks regarding inflation and referenced September’s quarter-point rate hike that brought rates to between 3.75% and 4%.

At the same time, the Institute for Supply Management’s (ISM) September manufacturing report, released Oct. 1, revealed its prices index climbing to 77.9 from 71.1, while the manufacturing PMI stayed expansionary at 54.5, signaling widening cost pressures.

The September US jobs report is slated for release at 12:30 UTC on Oct. 2, acting as the next major test for whether Bitcoin can hold its ground above $86,000 following its overnight gains.

Sustaining levels above $86,000 alongside continued ETF inflows would reinforce indicators of persistent demand. Conversely, a rapid pullback would mirror the fragility of prior failed breakouts. While returning fund interest has strengthened the foundation of the rally, maintaining these price points through the payroll announcement will demonstrate if this support can weather the upcoming macroeconomic examination.

?Frequently Asked Questions

01Why did Bitcoin rally overnight?

Bitcoin climbed back above $86,000 as demand for US spot Bitcoin ETFs recovered, aided by short covering as a plausible catalyst ahead of the US jobs report.

02What were the net inflows for US spot Bitcoin ETFs?

US spot Bitcoin ETFs recorded net inflows of $102.7 million on Oct. 1, according to Farside Investors’ ETF flow data.

03What percentage of liquidated futures were short positions?

According to CoinNess’s Oct. 2 estimate, 91.13% of liquidated Bitcoin futures positions over the 24-hour window involved short positions.

04When is the September US jobs report scheduled for release?

The September US jobs report is scheduled for 12:30 UTC on Oct. 2.