Bitcoin has recently experienced a remarkable surge, moving from a low of $62,050 on Sunday to reaching a peak of $66,500 late Monday. As of Tuesday, the Bitcoin price is undergoing a minor correction, slightly dipping below this crucial resistance level, yet maintaining a position above $65,000. Several significant elements have contributed to this upward momentum, including a short squeeze associated with the approaching US elections, robust demand in the spot Bitcoin market, and substantial inflows into US spot Bitcoin Exchange Traded Funds (ETFs).
Short Squeeze and the Impact of US Elections
The recent price rise can be partially credited to the liquidation of leveraged short positions. According to the latest investor note from Singapore-based trading firm QCP Capital, approximately $80 million worth of Bitcoin and Ethereum leveraged shorts were liquidated, exerting upward pressure on the market. Although some speculate that the delay of Mt. Gox’s repayment deadline to October 2025 played a role, this news was disclosed on Friday, indicating other factors influenced Monday’s rally.
QCP Capital highlights, “Although there could be many factors that could explain today’s move, it is quite an interesting time if we look at historical price action. We are in the middle of October and just three weeks away from the US elections.” In both 2016 and 2020, Bitcoin exhibited a pattern of remaining in a tight trading range for months before initiating a notable rally roughly three weeks before the US Election Day. In 2016, Bitcoin’s value doubled from $600 by the first week of January following the election. Similarly, in 2020, it surged from $11,000 to a high of $42,000 by January.
This year, October—often referred to as “Uptober” due to its historically strong performance—has been less impressive, with Bitcoin up a modest 1.2% compared to an average of 21% in previous years. The current rally, occurring three weeks before the US elections, suggests a possible repetition of history, potentially leading to further price appreciation as investor optimism grows.
Growing Demand for Bitcoin
For the first time since mid-2023, Bitcoin’s buy orders are matching sell orders in spot market order books across various exchanges. Ki Young Ju, Founder and CEO of CryptoQuant, emphasized this development on X: “Bitcoin buy walls on all exchanges are now strong enough to neutralize sell walls.”
This shift marks a significant change from the trend observed since May 2021. Young Ju elaborated, “Data from the last cycle (2020-2022). It’s the accumulated difference between quoted buy and sell volumes. Since May 2021, sell walls had been consistently thicker than buy walls until the end of the cycle.”
Increase in Spot Bitcoin ETF Inflows
Monday saw one of the highest Bitcoin ETF inflows on record, totaling $555.9 million, marking the largest net inflow day since June 3. This significant capital injection was distributed among several major asset managers. BlackRock received $79.5 million, Fidelity attracted $239.3 million, Bitwise accumulated $100.2 million, Ark Invest saw inflows of $69.8 million, and the Grayscale Bitcoin Trust (GBTC) experienced inflows of $37.8 million.
Nate Geraci, President of The ETF Store and host of the ETF Prime podcast, commented on these inflows via X: “Monster day for spot btc ETFs… $550mil inflows. Now approaching *$20bil* net inflows in 10mos. Simply ridiculous & blows away every pre-launch demand estimate. This is NOT “degen retail” $$$ IMO. It’s advisors & institutional investors continuing to slowly adopt.”
At the time of writing, BTC is trading at $65,750.
