Bitcoin: Will Friday’s jobs report data trigger the ‘Uptober’ rally?
U.S Spot Bitcoin ETF demand has been massive over the past two weeks, but the pace of inflows has dropped considerably.
The ETF complex saw a 9-day streak of net inflows totaling $3B. However, beyond the headline, the daily demand dropped from nearly $1B to a low of $31M on Monday. That alluded to a 96% decline in institutional appetite.
For his part, CryptoQuant analyst JA Maartun stated, “Bitcoin ETF demand is cooling fast” amid increasing potential sell-side pressure.
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According to him, short-term holders (STH) have sent 45K $BTC to exchanges, which could further derail the asset’s extended recovery.
Price looks calm. Under the surface? ~45,054 $BTC from Short-Term Holders just moved onto exchanges in 24H. That’s a lot of potential sell-side supply
Source: CryptoQuant
Bitcoin: Traders bet on $95K despite macro pressure
It’s worth noting though that macro pressure has been a key driver behind the ETF fluctuation and subsequent $BTC price pullback from $87K to below $84K. Even so, Binance CEO Richard Teng was still positive about the market.
The macro backdrop remains challenging, with high U.S. yields continuing to pressure risk assets. However, investor demand is showing signs of improvement.
In fact, Tuesday’s weak labor report has cleared the Fed rate hike fears ahead of the late October FOMC meeting. At the time of writing, the odds of another 0.25% rate hike had slipped to 42% while the chances for a rate pause surged to 57%.
Source: FedWatch Tool
The Non-Farm Payroll report, expected on Friday, 2nd October, will confirm whether the U.S labor market is indeed weakening. If so, the Fed will opt to hold the interest rate unchanged. That would boost risk assets, including Bitcoin.
On the contrary, if the Friday Payroll data hints at a strong labor market, then the rate hike fears may come back. So, Friday may decide if $BTC pushes forward or drags lower.
Surprisingly, Option traders have been aggressively betting on a potential upside rally to $90K and $95K. This was illustrated by the highest Open Interest (OI) dominated by calls (blue bars) targeting strike prices of $90K, $95K, and $100K.
Source: Deribit
Simply put, $BTC has tried to hold above $80K despite macro-driven pressure and a 96% dip in ETF demand in the past week.
Whether Friday’s labor report will renew the recovery remains to be seen. However, some traders may already be betting on an upside move towards $90K and above.
Final Summary
- Bitcoin’s ETF demand has dropped from nearly $1B to below $100M amid macro pressure
- Some traders have been betting on a potential rally to $90K, but this could depend on labor data on 2nd October.
