Bitcoin rallied above $81,000 on Thursday as Federal Reserve comments eased rate-increase expectations and institutional capital began flowing into the market. Federal Reserve Governor Christopher Waller said he could support leaving interest rates unchanged in September if inflation continues to cool, shifting market odds for a September rate increase to roughly 50% from 65% earlier in the day. Treasury yields declined following the remarks, lifting the broader cryptocurrency market.
Ethereum, XRP, and Solana each gained more than 5%, while Zcash and Cardano climbed more than 10%.
Shift From Short Covering to Fresh Capital
Bitcoin's initial push toward $81,000 relied heavily on short liquidations and closures rather than new long positions, according to analysis from CryptoQuant. However, Thursday marked a transition as US spot Bitcoin ETFs attracted $730.9 million—their largest single-day inflow since January. BlackRock's IBIT accounted for approximately $454 million, with funds from Fidelity, Grayscale, and others also drawing capital.
The inflows signal stronger underlying demand. August proved particularly strong for Bitcoin spot funds, which attracted roughly $3.5 billion, their best monthly performance since September 2025. Spot trading volume across major exchanges—including Binance, Coinbase, and MEXC—increased three to four times from early-August lows.
Large holders showed increased activity around exchanges, with hourly Bitcoin whale inflows repeatedly exceeding 2,000 BTC. Average deposit sizes on Binance climbed from roughly 20-30 BTC to more than 50 BTC, with peaks near 75 BTC, indicating broader market participation. Seven-day cumulative altcoin deposits also rose sharply from 15,000-20,000 to around 45,000, suggesting improved sentiment across the wider crypto market.
Options Market Signals Caution
Despite stronger spot demand, derivatives markets show restraint. About 29,600 Bitcoin options worth $2.39 billion expired Friday with a maximum pain level of $73,000. Call gamma exposure has converged at strikes above $80,000 as traders sell calls, while put gamma exposure remains minimal—positioning that could create friction around heavily populated strikes if option sellers adjust hedges.
Bitcoin reached $81,400 on August 28 before retreating into a $76,000-$81,000 range. CryptoQuant's 365-day moving average sits near $82,300, a level the firm uses to distinguish stronger long-term bull-market conditions. The firm's Bull Score remains at 70 after briefly reaching 80 during the August rally, the highest since October 2025.
Volatility markets, however, are becoming less aggressive. Monthly realized volatility increased to roughly 40%, while implied volatility declined to about 36%. Bitcoin open interest approaches $48 billion in dollar terms, though the same exposure declines when measured in BTC, suggesting the dollar increase partly reflects Bitcoin's higher price rather than proportional increases in trader exposure.
Next Test Requires Sustained Buying
Bitcoin now attempts the $80,000-$83,000 zone with a broader demand foundation than during its initial rebound phase. Short covering can accelerate a rally, but its effect fades as bearish positions close. Sustained advances require investors willing to purchase at progressively higher prices.
Thursday's ETF flows suggest that transition may be beginning, though a single session cannot establish durable institutional demand. Earlier in the week, Bitcoin spot funds recorded a $236 million outflow. Bitcoin must also absorb call positioning above $80,000 and clear the roughly $82,300 threshold while the options market continues to price lower volatility expectations.
Waller's comments have improved the macro backdrop, but that support remains conditional on incoming inflation data. Stronger-than-expected readings could restore expectations for tighter policy and reverse Thursday's easing in financial conditions. For now, Bitcoin has gained fresh spot capital and expanding participation across the crypto market—whether that becomes a sustained bull-market breakout depends on whether those buyers return.
