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Bitcoin has seen a significant rally, rising from a low of $62,050 on Sunday to a peak of $66,500 late Monday. As of Tuesday, Bitcoin price is correcting slightly below this key resistance level, but is hovering above $65,000. Several critical factors have contributed to the rally, including a short squeeze that coincided with the upcoming US elections, strong demand in the Bitcoin spot market, and large inflows into Bitcoin exchange-traded funds (ETFs) in the US.
#1 Short squeeze and US election impact
Yesterday’s price rise can be partly attributed to the liquidation of leveraged short positions. Singapore-based trading firm QCP Capital wrote in its latest report Investor note Nearly $80 million worth of leveraged short trades in Bitcoin and Ethereum were liquidated, putting upward pressure on the market. While some speculate that the postponement of Mt.Gox’s payment deadline to October 2025 played a role, that news was actually broken on Friday, suggesting there were other factors at play during Monday’s rally.
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“Although there may be many factors that could explain today’s action, it is a very interesting time if we look at historical price action. We are in mid-October and only three weeks away from the US elections. In both 2016 In 2020, Bitcoin remained in a tight trading range for several months before starting a significant rally approximately three weeks before US Election Day. In 2016, Bitcoin’s price doubled from $600 by the first week of January after the election. It rose from $11,000 to $42,000 by January.
This year, October — often referred to as “Uptober” due to its historically strong performance — was disappointing, with Bitcoin rising just 1.2% compared to an average of 21%. The current rally, occurring three weeks before the US election, suggests that history may repeat itself, which could lead to further price increases as investors grow more optimistic.
#2 Strong demand for Bitcoin
For the first time since mid-2023, Bitcoin buy orders and sell orders match on spot market order books across exchanges. Ki Young Joo, Founder and CEO of CryptoQuant, Highlight This development via X: “Bitcoin buy walls on all exchanges are now strong enough to neutralize sell walls.”
This shift represents a significant change from the trend observed since May 2021. “Data from the last cycle (2020-2022). It is the accumulated difference between the announced buy and sell volumes. Since May 2021, sell walls have been consistently thicker than buy walls until the end of the cycle,” shared Young Joo.
#3 Rise in Spot Bitcoin ETF Inflows
Monday saw one of the highest Bitcoin ETF inflows ever, totaling $555.9 million — the largest net inflow day since June 3. This large influx of capital has been spread among several major asset managers. BlackRock received $79.5 million, Fidelity attracted $239.3 million, Bitwise raised $100.2 million, Ark Invest saw inflows of $69.8 million, and Grayscale Bitcoin Trust (GBTC) saw inflows of $37.8 million.
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Nate Geraci, president of ETF Shop and host of the ETF Prime podcast, Comment About these inflows via This is not a “digen retail” $$$ IMO that advisors and institutional investors are slowly continuing to adopt.
At press time, Bitcoin was trading at $65,750.
Featured image created with DALL.E, a chart from TradingView.com