Bitcoin’s resilience driven by $2.23 billion ETF inflows that cleared speculative leverage

On August 26, the July PCE inflation reading came in at 3.7% headline and 3.3% core, figures that remain above the Federal Reserve’s 2% target.

Following the report, futures markets adjusted, raising the probability of a September rate hike to approximately 44%, up from 36% previously. Bitcoin reached an intraday peak of $79,251.60 on the same day and was trading near $78,000 at press time.

Bitget Research chief analyst Ryan Lee noted in a report:

“In-line is not the same as harmless. A core print at consensus leaves the existing policy debate largely intact and settles little.”

Lee stated that with rate expectations unchanged, Bitcoin’s price action is now driven by ETF flows, spot liquidity, and derivatives positioning rather than macro data surprises.

Indicator	Before / baseline	After Aug. 26 PCE	Why it matters for BTC
Headline PCE	Fed target: 2%	3.7%	Inflation remains too high for an easy dovish pivot.
Core PCE	Fed target: 2%	3.3%	Consensus print did not create a fresh bullish catalyst.
September hike odds	36%	44%	Macro pricing became marginally more hostile.
Bitcoin intraday high	—	$79,251.60	BTC still held near rally highs despite the macro headwind.
Press-time BTC price	—	Near $78,000	Suggests consolidation, not a breakdown.

The Bitcoin demand underneath the rally

Data from Glassnode indicates that US-traded spot Bitcoin ETFs absorbed $2.23 billion during the initial market squeeze. This period saw no single day of outflows and recorded the strongest seven-day inflow volume of 2026.

A daily tracker from Farside Investors recorded an additional $314.3 million in inflows on August 25. BlackRock’s IBIT led this activity with $284.4 million, extending a streak of positive inflows from August 17 through August 25 to a total of roughly $2.6 billion.

Accumulation occurred across every wallet-size cohort, ranging from small holders to the largest addresses.

On August 19, the market experienced the largest dollar-denominated single-day short liquidation event in Glassnode’s dataset since 2019. Approximately 85% of liquidations during this window originated from short positions.

Glassnode data reveals that Bitcoin futures open interest dropped by 11% during the late-August squeeze, while perpetual funding rates remained mostly positive.

Typically, a rally driven solely by forced buying leaves a visible mark in the futures market, with fresh leverage rebuilding as quickly as it is liquidated.

However, futures open interest fell 11% in BTC terms during the move. Funding rates stayed close to neutral, and Glassnode noted that new speculative longs did not replace the liquidated shorts.

Rally component	Data point	Interpretation
ETF creations during squeeze window	$2.23B	Spot demand absorbed supply during the move.
Aug. 25 ETF inflows	$314.3M	Demand continued after the initial squeeze.
IBIT contribution on Aug. 25	$284.4M	BlackRock remained the dominant flow driver.
Positive ETF streak	Aug. 17–Aug. 25	Persistent demand, not a single-day anomaly.
Cumulative inflows across streak	Roughly $2.6B	Cash bid stayed present through the rally.
Short-liquidation share	~85%	The first leg was squeeze-driven.
Futures open interest	Down 11% in BTC terms	Speculative leverage was flushed, not rebuilt.
Funding	Near neutral	No obvious sign of overheated long positioning.

The liquidity backdrop for Bitcoin that survives a quiet print

Sygnum Bank CIO Fabian Dory wrote in a note:

“A core PCE print in line with consensus, after strong service-led PMI data and a weak payroll month, describes gradual disinflation rather than a demand shock.”

Dory described this combination as highly beneficial for digital assets, despite being less dramatic. This dynamic keeps the Fed’s hand balanced, maintaining expectations for the September meeting.

Dory identified Treasury cash balances, the eSLR, private credit creation, and stablecoin expansion as channels that remain constructive without requiring a policy pivot. He warned against interpreting a quiet data print as a quiet market backdrop.

The total stablecoin market capitalization is near $303.7 billion, up $2.8 billion over the past week, although 30-day growth remains modest. Data from NYDIG shows stablecoin supply increased by $1.25 billion during the rally, primarily driven by USDC. This suggests that liquidity on trading venues improved more rapidly than broader offshore participation.

Related Reading

Why Bitcoin’s $80,000 rally just flipped from short squeeze to long squeeze

The next test is a real confluence zone

A significant confluence zone exists between approximately $81,000 and $86,000. This area includes a self-custody cost-basis shelf, a dealer gamma flip near $82,300, surviving short-liquidation levels, and concentrated long-term-holder supply.

Glassnode identifies a settled close above $83,300 as the confirmation level for a genuine breakout, provided ETF intake remains steady.

On the downside, the short-term-holder cost basis is near $70,000, with a firmer support floor between $62,000 and $65,000. A retreat to Bitcoin’s original squeeze level near $62,900 would, according to Glassnode, effectively unwind the entire rally episode.

Theo CIO Iggy Ioppe stated:

“Nothing in this number forces a hike, and nothing in it delivers a cut.”

Ioppe argued that the policy stance remains easier than current inflation and labor data would justify, a condition that has persisted for months. Every FOMC meeting that passes without action acts as easing by default, providing structural support for risk assets that does not rely on the Fed becoming overtly dovish.

Ioppe noted that Bitcoin “remains more contained than the return of institutional flows would suggest,” viewing this gap as a timing issue while the underlying thesis remains intact.

Whether Friday confirms the bid or exposes it

Roughly 81,700 Bitcoin options valued at $6.44 billion are set to expire on Deribit on Friday at 08:00 UTC. Calls outnumber puts with 44,639 contracts to 37,061, with significant concentrations at the $75,000 and $80,000 strikes.

Calls are now more expensive than puts through the October expiry. Bitcoin’s implied volatility has risen from the fourth percentile of its trailing twelve months on August 17 to the 56th percentile currently.

BTC level / zone	Market structure	Signal if tested
$81,000–$86,000	Cost-basis supply, seller asks, gamma positioning, remaining short-liquidation levels	Main resistance and absorption zone.
$82,300	Dealer gamma flip	Could amplify or dampen moves depending on positioning.
$83,300	Glassnode breakout confirmation level	Settled closes above here support the bull case.
$95,000–$100,000	Stretch upside target zone	Becomes plausible if ETF demand persists and $86K is cleared.
~$70,000	Short-term-holder cost basis	First major downside warning level.
$62,000–$65,000	Deeper support floor	Bear-case test if ETF demand fades.
~$62,900	Original squeeze level	Retest would largely unwind the rally episode.
$6.44B Friday options expiry	Deribit BTC options deadline	Near-term volatility catalyst testing both bull and bear cases.

DWF Labs market insights lead Martin Lee commented:

“Traders are now paying for upside in the short term. An expected reading would allow optimism from last week to continue, and risk-on assets will maintain their momentum.”

The bull case scenario involves Bitcoin closing settled sessions above $83,300 while ETF inflows continue and funding remains contained.

In this scenario, the $81,000 to $86,000 band transitions from resistance to absorbed supply, opening the path to $95,000 to $100,000 as the next stretch targets.

The bear case scenario sees wallet-cohort accumulation lose breadth and ETF flows flip toward outflows, pulling Bitcoin below its $70,000 short-term-holder cost basis.

Under this path, the move resembles delayed profit-taking rather than a cash-funded recovery, with the $62,000 to $65,000 floor serving as the next real test if the retreat continues.

If the buyers absorbing supply near $81,000 are genuine, they must prove their strength this Friday against options expiry, Jackson Hole developments, and a $6.4 billion deadline, all occurring simultaneously.

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