Bitcoin has gained about 42.5% heading into the end of Q3, but Bitfinex analysts have warned that another sustained advance will require stronger spot buying as leverage falls and ETF inflows slow.
Summary
- Bitfinex puts Bitcoin on course for its strongest quarter since Q4 2024.
- The analysts say reduced leverage limits liquidation risk but does not create fresh demand.
- A recovery above $85,000 could return 760,000 BTC to profit, according to the team.
- U.S. ETF purchases have slowed despite a nine-session inflow streak.
Bitfinex Alpha reported on Sep. 30 that Bitcoin’s quarterly gain would rank as its second-strongest Q3 performance since 2013, while warning that futures positioning and fund purchases now offer less support for another advance.
With options volatility close to a one-year low and speculative positions reduced, the analyst team said the market needs buyers willing to acquire Bitcoin directly. In their assessment, removing borrowed positions can reduce the chance of a sharp liquidation-driven decline without providing the demand needed to lift prices.
Bitcoin’s next advance depends on cash buyers
For the Bitfinex team, falling futures open interest carries two meanings: traders have removed leverage, but their retreat also points to weaker speculative appetite and continued profit-taking.
The analysts said Bitcoin-denominated open interest has failed to expand alongside the price, suggesting futures traders have shown little willingness to build new exposure during the rally. They cautioned against treating a market with fewer leveraged positions as automatically bullish.
“Low leverage limits the scope for a price decline to accelerate through liquidations, but it does not create a buyer. That buyer must come from the spot market,” the team said.
An earlier examination of the rally reached a similar distinction between cash purchases and borrowed positions. In a Sep. 24 report, crypto.news covered rising futures leverage as Wojciech Kaszycki, strategy adviser to Bitcoin treasury company BTCS S.A., said ETF purchases had supported the initial advance before futures exposure began accumulating.
Kaszycki estimated at the time that open interest had risen about 7% over a month, with funding near 8% on an annualized basis. He described funding as positive but not excessive, while warning that risk could increase if borrowed positions grew faster than cash demand.
In assessing the strength of buying, Kaszycki said he looks for ETF inflows sustained over weeks, then compares the growth in outstanding futures contracts with Bitcoin’s price. His comments focused on whether the rally could keep attracting purchases after short sellers had finished closing losing positions.
U.S. ETF buying has slowed despite continued inflows
According to Bitfinex, Bitcoin ETFs recorded nine consecutive sessions of net inflows totaling $3.08 billion, although their daily purchases fell closer to the amount of new Bitcoin entering circulation.
The report’s absorption-to-emission measure compares ETF purchases with roughly 450 BTC produced by miners each day. Bitfinex said the ratio fell from 25.6 times issuance on Sep. 21 to 1.8 times on Sep. 29, and placed the recovery needed to absorb selling pressure near five times issuance, or about $190 million daily.
For American investors following listed Bitcoin funds, the earlier weekly figures show where demand was concentrated. A Sep. 26 report on weekly Bitcoin ETF inflows put purchases at $2.39 billion during Sep. 21–25, citing Farside Investors data.
Farside’s figures showed daily inflows declining from $999 million on Monday to $714.7 million on Tuesday, $346.9 million on Wednesday, $190.7 million on Thursday and $134.5 million on Friday. Every session remained positive despite the slower pace.
Across individual U.S. products, the same report placed BlackRock’s IBIT first with $1.16 billion in weekly inflows. Fidelity’s FBTC received $701.6 million, ARK 21Shares’ ARKB collected $294.7 million, and Morgan Stanley’s MSBT added $203.3 million.
The weekly coverage also recorded a much smaller net inflow of roughly $6.1 million during the preceding week, when withdrawals on Sep. 15 and 16 were followed by renewed buying.
A $85,000 recovery could ease selling pressure
Around current prices, Bitfinex analysts said buyers have been absorbing coins sold by holders seeking to exit near their purchase prices.
The report placed 1.39 million BTC between acquisition prices of $84,000 and $86,500. Immediately below, it said holdings in the $82,500–$84,000 band increased from about 110,000 BTC on Sep. 27 to 306,000 BTC on Sep. 30.
As buying builds within the lower band, the team said fewer coins remain available from holders waiting to sell at breakeven. A recovery above $85,000 would return the 760,000 BTC acquired between $84,000 and $85,000 to profit, according to their analysis.
The analysts also said such a recovery would lift the share of Bitcoin supply in profit above 75%. They view that threshold as relevant to assessing whether the market has entered a new bull phase.
During the pullback, another analyst identified a nearby support area. In Sep. 28 coverage of Bitcoin’s September breakout support, Bitget Wallet research lead Lacie Zhang identified $81,500–$83,000 as the zone to watch.
Zhang attributed the retreat to profit-taking, reduced leveraged long positions, firmer U.S. Treasury yields and a stronger dollar. In her assessment, continued ETF buying and contained liquidations could support consolidation within the breakout area.
She said several sessions of ETF withdrawals, another increase in the 10-year Treasury yield and a break below $82,000 would raise the risk of a deeper decline.
Lower futures premiums have preceded gains
Within futures markets, Bitfinex attributed much of the reduction in positions to shrinking premiums, which have reduced the incentive to maintain trades built around the difference between spot and futures prices.
The report put the October contract’s annualized premium at 5.1%. At the Chicago Mercantile Exchange, it recorded a 16,075 BTC decline in open interest on Sep. 28 as September contracts expired.
Looking at comparable conditions since 2022, the analyst team said elevated futures settlement ratios combined with compressed returns from those trades had preceded a median 30-day Bitcoin gain of 8.9%.
The team made its interpretation conditional on futures premiums remaining at current levels and open interest staying flat, saying historical patterns under those conditions suggest Bitcoin could continue to appreciate.