Bitcoin nears $69K mark amid strong ETF inflows and short liquidations

Bitcoin’s surge toward its two-month high of $69,000 was fueled by strong inflows into spot exchange-traded funds and a marked rise in short liquidations.

At press time Bitcoin (BTC) was trading at approximately $67,739, rising by 0.6% in the past 24 hours, while the asset’s market capitalization hovers around $1.33 trillion, driven by a daily trading volume close to $30 billion.

Short liquidations surge, fueling price rally

Data from Coinglass indicates that short liquidations played a critical role in propelling Bitcoin’s latest upward movement. Over the past 24 hours, Bitcoin short liquidations reached $17.91 million, surpassing $11.8 million in long liquidations. This shift highlights a typical market dynamic where the forced covering of short positions elevates demand, pushing Bitcoin’s price upward and creating additional buying pressure.

In addition to market-driven liquidations, inflows into U.S.-based spot Bitcoin ETFs have reached significant levels. Over the past week, these ETFs reported five consecutive days of net inflows, totaling more than $2.12 billion. This trend continued into the start of this week, with $294.29 million in fresh inflows.

On Oct. 24, data from SoSoValue showed that spot Bitcoin ETFs amassed net inflows of $188.11 million, led by BlackRock’s IBIT ETF, which recorded an inflow of $165.54 million. This marks the ninth consecutive day of inflows into BlackRock’s ETF, with the fund amassing nearly $2 billion in this period alone.

Meanwhile, Bitwise’s BITB ETF contributed $29.63 million in inflows, despite having experienced an outflow of $25.2 million the previous day. Grayscale’s GBTC ETF, however, countered this momentum with $7.05 million in outflows, continuing a trend that has seen over $20 billion leave the fund since its inception.

Since the debut of the initial spot Bitcoin ETFs in January, the 12 currently available products have accumulated $21.53 billion in net inflows, a milestone that Bloomberg ETF analyst Eric Balchunas has described as “the most difficult metric” to achieve in the ETF landscape. 

Balchunas emphasized the rarity of this accomplishment, noting that gold ETFs required five years to reach the same figure, highlighting the rapidly growing appetite for Bitcoin investment among institutions.

Political tailwinds and potential policy shifts

Beyond immediate market activity, the political landscape in the United States is also influencing investor sentiment.

Speculation surrounding a possible win for Donald Trump in the upcoming presidential election has spurred optimism among Bitcoin investors, who see a pro-crypto administration as likely to enhance blockchain innovation and reduce regulatory obstacles.

The former president’s policy stance, which includes advocating for a blockchain-friendly regulatory environment and potentially replacing SEC Chair Gary Gensler, aligns with many institutional investors’ interests in reduced regulatory oversight.

The potential shift has provided an additional boost to Bitcoin’s price momentum, as it could pave the way for an accommodating regulatory environment conducive to cryptocurrency growth.