Bitcoin Struggles to Break Higher as ETF Demand Weakens: Bitfinex Alpha

Bitcoin (BTC) was trading near $84,000 after another failure to break above its yearly open at $87,700. Bitfinex said the next move will depend more on renewed spot demand than on increased futures leverage.

Bitcoin had reached $87,200 on October 2, before retreating below the key level. The rejection marked the third failed breakout in the past ten days. The question now is whether it will flip the trend.

Leverage Drops as Demand Slows

According to Bitfinex, futures activity drove much of the move, with open interest rising by $2.1 billion before the September payrolls report. Futures open interest then fell by $1.5 billion as traders closed positions after the data.

Aggregate futures open interest now stands at about 625,000 BTC, its lowest level since January 1. The decline suggests lower leverage.

At the same time, spot demand has also weakened, with US spot Bitcoin ETFs recording $241.1 million in net inflows from September 28 to October 2. That was about 90% below the $2.39 billion recorded a week earlier. The nine-day inflow streak also ended on September 30 with a $148.7 million outflow.

ETF Demand and Key Levels

BlackRock’s IBIT recorded $450.2 million in inflows, while Fidelity’s FBTC saw $168 million in outflows. Bitfinex attributed the weaker demand partly to the average ETF holder’s cost basis of about $84,320.

Meanwhile, ETF inflows have averaged about $65 million when Bitcoin trades within 2% of that level, compared with $136 million when it trades more than 10% above it. Bitfinex sees $86,000 as an important level, while a drop below $82,600 could put ETF holders back in losses.

Beyond ETF flows, the $84,000 to $84,500 range holds roughly 867,000 BTC. It is the largest cost-basis cluster, with about 75% of Bitcoin supply in profit. Weak payroll growth has also raised expectations of an October rate pause, although inflation, spending and Treasury yields remain elevated.

Bitfinex expects BTC to consolidate between $84,000 and the yearly open. Stronger ETF inflows could support a move toward $90,000. Sustained trading below $81,300 could bring $77,000 and the True Market Mean near $77,200 into focus.