U.S. spot Bitcoin ETF demand has cooled significantly after a period of strong inflows. The ETF complex logged a 9-day streak of net inflows totaling $3 billion, but daily demand fell from nearly $1 billion to $31 million on Monday, representing a 96% decline in institutional appetite.
Short-term Bitcoin holders have moved 45,000 BTC to exchanges within 24 hours, adding potential sell-side pressure to the market. Bitcoin's price retreated from $87,000 to below $84,000 amid broader macroeconomic headwinds, particularly elevated U.S. yields affecting risk assets.
The Federal Reserve's interest rate trajectory remains a key driver for Bitcoin movement. A weak labor report on Tuesday reduced rate hike expectations ahead of the late October FOMC meeting, with the probability of a 0.25% rate increase falling to 42% and a rate pause rising to 57%.
The Non-Farm Payroll report scheduled for Friday, October 2nd, will provide fresh data on U.S. labor market strength. A weaker report would likely support a Fed rate pause and boost risk assets including Bitcoin. A strong report could revive rate hike concerns and pressure prices lower.
Options traders have been positioning aggressively for an upside move, with the highest open interest concentrated in call options at $90,000, $95,000, and $100,000 strike prices. Whether Bitcoin sustains its recovery above $80,000 may ultimately hinge on Friday's employment data.
