Bitcoin climbed above $114,000 on Thursday, marking its highest level since August 24 and reclaiming ground after a Tuesday low near $110,714. The move coincided with a fresh wave of demand into U.S. spot Bitcoin ETFs, which together logged an eight-week high in inflows.
Data provider SoSoValue shows U.S. spot BTC ETFs absorbed $757.1 million on Wednesday, bringing total September accumulation to about $1.39 billion. Market observers said the inflows were spurred by unexpectedly favorable inflation data — notably the PPI — and growing expectations around the Federal Reserve’s next rate decision.
Pseudonymous CryptoQuant analyst DarkFrost told Decrypt that the PPI print helped catalyze the buying, and highlighted that the price advance came alongside improving derivatives metrics: open interest rose about 6.6% to $43.3 billion, and funding rates turned positive, indicating stronger risk appetite among futures traders.
Meanwhile, Ethereum-focused funds lagged in September, showing a negative net flow of roughly $668.72 million, according to SoSoValue. CEX.IO lead analyst Illia Otychenko described the pattern as a capital rotation, with investors shifting funds back into Bitcoin ahead of the Fed’s September 17 decision.
Macro expectations are central to the story. Worsening jobs figures have increased speculation that the Fed will loosen policy, and markets are pricing in a rate cut. CME’s FedWatch tool currently assigns about 92% odds to a 25 basis point cut and an 8% chance of a 50bp move; a separate prediction market, Myriad, places an 80% probability on a 25bp reduction.
What this means for traders: rising ETF demand and supportive derivatives flows can sustain rallies, but momentum tied to macro bets can reverse quickly if economic data or Fed guidance shifts. Investors should note that inflows and price gains are not guarantees of continued upside — market liquidity, funding pressures and policy surprises remain risks.
Bottom line: Large ETF inflows have helped lift Bitcoin above $114K as traders position for a potential Fed rate cut. The next two weeks of macro releases and the Fed’s statement will likely dictate whether this run continues or pauses.
Source: Decrypt. Read the original coverage for full details.