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Bitcoin experienced a significant rally, rising from a low of $62,050 on Sunday to a peak of $66,500 late Monday. As of Tuesday, the price of BTC is correcting slightly below this key resistance level, but it is moving above $65,000. There are several key factors that have contributed to this rally, including a short squeeze associated with the upcoming US election, strong demand in the Bitcoin market, and massive inflows into US spot Bitcoin Exchange Traded Funds (ETFs).
#1 Short Press and Influence US Elections
Yesterday’s price increase can be attributed in part to the liquidation of profitable short positions. Singapore-based trading firm QCP Capital writes in its latest investor note that Bitcoin and Ethereum shorts worth about $80 million have been liquidated, using high pressure on the market. Although some predict that the deadline to pay Mt. Gox in October 2025 played a role, the news was already published on Friday, suggesting that other factors were present during Monday’s meeting.
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“While there may be many factors that could explain today’s move, it is an exciting time to look at historical price action. We are in the middle of October and there are only three weeks left until the US election,” noted QCP Capital. In both 2016 and 2020, Bitcoin remained in a tight trading range for months before starting a significant rally about three weeks before US Election Day. In 2016, Bitcoin doubled in price from $600 in the first week of January following the election. Similarly, in 2020, it increased from $11,000 to a high of $42,000 in January.
This year, October—commonly referred to as “Uptober” because of its historically strong performance—has been difficult, with Bitcoin up only 1.2% against an average of 21%. The current rally, which is taking place three weeks before the US election, suggests that history may repeat itself, which could lead to higher prices as investors’ optimism grows.
#2 Strong Demand for Bitcoin
For the first time since mid-2023, Bitcoin buy orders match sell orders on the market’s order books on all exchanges. Ki Young Ju, Founder and CEO of CryptoQuant, emphasized this development with X: “Bitcoin buying walls on all exchanges are now strong enough to eliminate selling walls.”
This change marks a significant change in the trend seen since May 2021. “Data from the last cycle (2020-2022). It is the cumulative difference between the quoted buy and sell volumes. Since May 2021, sell walls have been tighter than buy walls until the end of the cycle,” Young Ju said.
#3 Surge In Spot Bitcoin ETF Inflows
Monday saw the highest Bitcoin ETF inflows on record, reaching $555.9 million—the biggest day of inflows since June 3. BlackRock received $79.5 million, Fidelity attracted $239.3 million, Bitwise raised $100.2 million, Ark Invest saw an inflow of $69.8 million and Greyscale Bitcoin Trust (GBTC ) received $37.8 million in revenue.
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Nate Geraci, President of the ETF Store and host of the ETF Prime podcast, commented on this inflow via X: “Amazing day for btc ETFs… $550mil inflow. Now approaching *$20bil* net income in 10mos. It is simply ridiculous and removes all pre-implementation measures of need. This is NOT “degen retail” $$$ IMO. Advisers and institutional investors continue to take it slow.”
At press time, BTC traded at $65,750.
The featured image was created with DALL.E, a chart from TradingView.com
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