Bitcoin fell below $82,000 on October 22, with renewed demand from U.S. spot exchange-traded funds (ETFs) proving insufficient to support the price. The funds drew approximately $1.08 billion across three consecutive sessions ending October 21, according to figures based on SoSoValue data, yet the asset struggled to sustain a recovery that had earlier taken it above $84,000. The divergence is drawing attention because these funds, which hold bitcoin directly and trade through standard brokerage accounts, are widely followed as a gauge of institutional participation in the market.

Spot Bitcoin ETF Inflows Accelerate

American retail and institutional investors have rotated into Bitcoin aggressively this week, driving net creations higher across major funds. SoSoValue data shows the funds added $528 million in assets on Wednesday, their strongest single-day increase in more than a month. The gains were concentrated in BlackRock's IBIT, Fidelity's FBTC, Grayscale's GBTC, and Bitwise's BITB.

The Wednesday surge followed $23 million in inflows on Tuesday and $526 million on Monday. As a result, monthly flows have swung from negative territory to a positive $460 million. If the month ends at current levels, it will mark the fourth consecutive month of net inflows for these products, which added $2.65 billion last month and $3.52 billion in August. Net creations occur when new share purchases outpace redemptions, meaning the funds collectively added to their bitcoin holdings even as the spot price struggled.

The buying wave followed a bold long-term forecast from JPMorgan Asset Management. In a report this week, the bank's analysts predicted that Bitcoin will outperform stocks, bonds, and even gold over the long term, with an anticipated annualized growth rate of roughly 10%. They cautioned, however, that the asset's volatility may deter some investors from allocating to the cryptocurrency.

Bitcoin is also bracing for additional purchases from Strive, which has now become one of the biggest holders of the asset. The company has accumulated 36,818 coins and raised more than $600 million this week to buy Bitcoin, doing so through the launch of the IPO of SATS. Its purchases add a corporate-treasury source of demand on top of the ETF creations.

Risk-On Mood Comes Under Pressure

The ETF inflows also took place as investors embraced a broader risk-on sentiment following strong SpaceX earnings. In a statement, the company said its revenue more than doubled last quarter and that it turned a profit during the period. Most notably, SpaceX floated deliberations over a merger with Tesla, a significant move considering the two companies together hold more than 30.2k Bitcoins.

SpaceX's earnings report reignited animal spirits in the stock market, with the Dow Jones, Nasdaq 100, and S&P 500 indices continuing their rallies. The move also coincided with falling bond yields and lower crude oil prices.

The risk, however, is that a reversal is underway across those assets today. Futures tied to the Dow Jones dropped 225 points, while contracts linked to the S&P 500 fell 60 points. Crude oil prices are rising, with Brent and West Texas Intermediate (WTI) reaching $111.60 and $100, respectively. If the trend continues, there is a risk that Bitcoin ETF inflows will remain under pressure. How those futures move, how quickly Strive puts its new capital to work, and whether monthly flows finish positive for a fourth straight month are the near-term data points to watch.

Technical Outlook

The daily chart shows that the Bitcoin price has remained locked in a tight range this month. It has pushed above the upper side of a falling wedge pattern, a formation comprised of two descending and converging trendlines that normally precedes a strong bullish breakout over time.

The asset has remained above its 50-day and 100-day moving averages, a sign that bulls have prevailed for now. It also trades above the Supertrend indicator, which is generally viewed as a bullish signal.

Based on this setup, the analysis points to the likelihood of a strong bullish breakout in the near term. If that occurs, the next important target to watch sits at $87,254. A surge above that level would point to further gains toward $90,000, followed by $100,000.

This article is for informational purposes only and does not constitute financial advice. Bitcoin prices are volatile, and investors can lose capital. Readers should conduct independent research before making investment decisions.

This article originally appeared on The Market Periodical.