Bitcoin’s advance from approximately $63,500 to above $80,000 received substantial support from spot buying rather than new leveraged positions, QCP Capital said on Aug. 28.
Summary
- Bitcoin rose from $63,500 as spot ETFs drew $2.8 billion across eight consecutive sessions overall.
- Futures open interest fell from 646,000 BTC to 588,000 BTC while Bitcoin prices moved higher.
- U.S. spot Bitcoin ETFs ended nine inflow sessions with $201.9 million in August 28 outflows.
- July headline PCE rose 3.7% annually, while core PCE remained at 3.3%, official data showed.
- Treasury will double long-end buybacks to at least $4 billion per operation beginning September 9.
The trading firm estimated that U.S. spot Bitcoin exchange-traded funds attracted roughly $2.8 billion across eight consecutive sessions during the rally. Meanwhile, BTC-denominated futures open interest declined from about 646,000 BTC in mid-August to 588,000 BTC.
That combination suggests spot purchases and short covering drove much of the move. It differs from a rally led by traders opening aggressive leveraged long positions. However, the latest verified figures show that institutional demand has begun to cool after Bitcoin failed to hold above $80,000.
Bitcoin rally gained support as leverage declined
Bitcoin briefly traded above $81,000 after climbing from roughly $63,500 within little more than a week. QCP said funding rates remained contained during the advance, despite the sharp increase in price.
Falling open interest means traders closed futures positions on a net basis. Some bearish traders likely bought Bitcoin or futures to cover short positions as prices rose. At the same time, ETF inflows provided identifiable demand through regulated U.S. investment products.
QCP said the combination “suggests that short covering and spot demand have played a larger role than fresh leveraged longs chasing the move.” That assessment represents the firm’s interpretation of the market data, rather than proof that every ETF purchase translated directly into immediate Bitcoin buying.
The structure initially appeared healthier than an advance accompanied by rapidly rising open interest and expensive funding. Excess leverage can increase liquidation risk when prices reverse. Still, falling leverage does not guarantee that Bitcoin will maintain its gains.
As crypto.news reported in its coverage of Bitcoin’s $80,000 breakout, U.S. spot funds attracted about $1.92 billion during the week ending Aug. 21. That marked their strongest weekly intake since October 2025.
Bitcoin ETF outflows test the spot-demand argument
The latest ETF data introduced the first clear test of QCP’s spot-support thesis. U.S. spot Bitcoin ETFs recorded $201.9 million in net withdrawals on Aug. 28, ending nine consecutive inflow sessions.
ARK 21Shares’ ARKB posted $114.9 million in outflows. Bitwise’s BITB lost $49.7 million, while BlackRock’s IBIT recorded $33.4 million in withdrawals. VanEck’s HODL also lost $13.2 million, according to data cited by crypto.news.
The reversal represented a $444.2 million change from the previous session’s $242.3 million inflow. However, the funds still collected approximately $924.5 million over the Aug. 24–28 trading week.
However, Bitcoin subsequently traded near $77,500 on Aug. 29 after falling about 2.9% over 24 hours, as crypto.news reported. The decline followed a failed attempt to maintain the move above $80,000.
One outflow session does not establish a sustained institutional exit. Continued withdrawals would provide stronger evidence that ETF demand is weakening. Renewed inflows, by contrast, would support QCP’s view that spot participation remains an important foundation for the rally.
Inflation keeps the Federal Reserve constrained
The U.S. inflation backdrop remains less supportive. Bureau of Economic Analysis data showed that headline personal consumption expenditures inflation reached 3.7% year over year in July. Core PCE, which excludes food and energy, remained at 3.3%.
Both indexes rose 0.2% from June. The annual figures remained above the Federal Reserve’s 2% objective, limiting policymakers’ ability to loosen monetary conditions.
Federal Reserve Chair Kevin Warsh reinforced that concern during his Aug. 28 Jackson Hole address. He said the Fed’s “predominant focus right now should be on prices” and noted that broad financial conditions were difficult to describe as restrictive.
Markets had assigned an estimated 35% probability to a 25-basis-point September rate increase before the speech, according to QCP. That probability was a market estimate, not a Federal Reserve forecast or commitment.
The next policy decision will depend on incoming inflation, labor-market and activity data. Higher rate expectations could pressure Bitcoin by strengthening the dollar and raising yields on lower-risk assets.
Treasury buybacks provide liquidity but are not QE
A separate liquidity factor will arrive on Sept. 9. The U.S. Treasury Department will increase its long-end liquidity-support buybacks from a maximum of $2 billion to at least $4 billion per operation.
The change covers nominal securities in the 10-to-20-year and 20-to-30-year sectors. It will remain in place through Nov. 4, when the Treasury plans to provide more information during its next quarterly refunding.
The program aims to improve trading liquidity in older Treasury securities. It does not create central-bank reserves and does not constitute Federal Reserve quantitative easing. No official agency has established that the program caused Bitcoin’s rally.
For Bitcoin, the next test is whether ETF demand returns while funding remains contained. A gradual recovery in open interest would point to measured positioning. Rapid leverage growth alongside rising prices would make the advance more vulnerable to liquidations.
