Bitcoin above $85,000 as ETF flows face test

Bitcoin climbed above $85,000 on Oct. 2 after a short squeeze that began before the U.S. payrolls release, then slipped back after the jobs data. At the time of reporting Bitcoin traded near $85,276, up about 0.8% over 24 hours and below the roughly $86,000 level reached before the payrolls.

On-chain analytics firm Glassnode recorded a burst of forced buying before the payrolls. The firm measured about $50 million of short liquidations in a ten-minute period at 04:20 UTC on Oct. 2, roughly eight hours before the Bureau of Labor Statistics published September employment figures. Prices were more than 1% below their immediate pre-release level by 15:40 UTC the same day.

Open interest, the dollar value of outstanding futures positions, rose by $2.1 billion in the 24 hours before the payrolls and fell $1.5 billion after the release. Positions increased about 2.5% when measured in coins during the build-up period, Glassnode reported.

U.S. spot Bitcoin ETFs showed buying before the payrolls in available flow data. A fund-flow table from Farside Investors recorded $102 million of net inflows on Oct. 1, the session before the jobs report. Flow figures for Oct. 2 were incomplete at the time of the study.

A market-volume baseline from Glassnode’s Sept. 30 study put combined spot-exchange and U.S. spot-ETF trading volume at about $6.4 billion per day, near the lower end of the range recorded since the ETFs launched.

Market expectations for Federal Reserve policy shifted ahead of the payrolls. Glassnode estimated the odds of a quarter-point rate hike at the Oct. 28 meeting fell from about 66% on Sept. 28 to roughly 22% by 15:00 UTC on Oct. 2, using fed funds futures and the effective federal funds rate. The Fed’s target range was set at 3.75%–4.00% on Sept. 16.

The September employment report showed payrolls rose by 29,000 and the unemployment rate was 4.2%; the Bureau of Labor Statistics described both measures as little changed.

Yield movements on Oct. 2 showed short-term yields falling while longer-term yields rose, with the 10-year Treasury yield near 5.2% at one point, Glassnode’s intraday data indicated.

The Institute for Supply Management’s services report for September was scheduled for Oct. 5 at 10:00 a.m. ET; the August survey posted a headline PMI of 55.4, an employment subindex of 47.8 and a prices index of 72.6.

The next U.S. ETF flow sessions and subsequent spot-market trading are due to report whether fund demand continued after the payrolls and whether broader spot participation increased following the short squeeze.