Bitcoin's latest pop came during a broader risk-on day, with equities up, yields easing, and the greenback weaker. It followed Federal Reserve Governor Christopher Waller signaling he would support holding rates steady if inflation keeps cooling. That backdrop gives Bitcoin another chance to stick above a level it has struggled to hold. It also comes on the heels of a hawkish Jackson Hole speech by Federal Reserve Chairman Kevin Warsh that rekindled worries the Fed could raise rates again if inflation remains elevated.
Spot Bitcoin ETFs in the U.S. found more buyers in August, but the flow has been uneven, with two notable outflow days over the past week. Glassnode said the seven day average intake during the rally reached $290 million per day, while overall trading activity stayed muted versus prior bull runs. The firm added that "inflows driven by discrete policy headlines that lack broader market velocity often coincide with local inflection points."
On a seven day basis, the Coinbase premium - the price gap between the biggest U.S. exchange and offshore venues - has stayed negative for more than four months. "We would like to see higher time frame confirmation alongside continued positive ETF flows before viewing this as a confirmed breakout from the range Bitcoin has traded in since Aug. 2," said Jake Kennis, a senior research analyst at Nansen. "A sustained daily close above the upper end of that range would provide a stronger signal that the market is moving beyond the recent consolidation."
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A big slice of August's jump looks like it came from a short squeeze. "We suspect that a good chunk of that rally was driven by short covering, which has left positioning close to flat," said Tony Sycamore, an analyst at IG Australia. He added, "technically we continue to expect dips back into the mid to low $70s to be well supported by buyers leaning against the 200-day moving average at $69,507."
Liquidity is thin. "The lower liquidity right now means that small shifts in sentiment like this can have outsized impacts," said Adam McCarthy, who leads research at trading firm LO:TECH. Glassnode estimates long term holders are eyeing the $83,000 to $86,000 area to take profits, a zone that could cap near term rallies.
Speaking as a research analyst for Bitget Wallet, Lacie Zhang said, "A sustained move above $82,000, backed by persistent ETF inflows and restrained funding, would provide stronger confirmation that the market is ready for another leg higher." The Federal Open Market Committee meets on Sept. 15 and 16, a date investors will watch closely for policy cues that could sway momentum. Bitcoin was up 4.7% to $80,995 in New York as of 12:52 p.m. on Thursday.
