Bitcoin experienced a significant rally, climbing from a low of $62,050 on Sunday to a high of $66,500 behind schedule Monday. As of Tuesday, the BTC price has corrected slightly below this key resistance level but is hovering above $65,000. Several critical factors contributed to the rally, including a compact session coinciding with the upcoming U.S. election, forceful demand in the Bitcoin spot market, and significant inflows into U.S. spot Bitcoin Exchange Traded Funds (ETFs).

#1 Brief squeeze and influence on US elections

Yesterday’s price rally can be partially attributed to the liquidation of leveraged compact positions. Singaporean trading company QCP Capital writes in its latest report investor’s attention that almost $80 million worth of Bitcoin and Ethereum leveraged shorts were liquidated, putting upward pressure on the market. While some have speculated that Mt.Gox’s repayment deadline to October 2025 played a role, the news was already released on Friday, suggesting that other factors were at play in Monday’s surge.

“While there could be many factors that could explain today’s move, it is quite an interesting time if we look at historical price action. We are in mid-October and only three weeks away from the US elections,” notes QCP Capital. In both 2016 and 2020, Bitcoin remained in a tight trading range for several months before beginning a significant rally around three weeks before US Election Day. In 2016, the price of Bitcoin doubled from $600 in the first week of January after the election. Similarly, in 2020, it rose from $11,000 to a high of $42,000 in January.

This year, October – often called “Uptober” due to its historically forceful performance – was disappointing, with Bitcoin’s price up just 1.2% compared to the average of 21%. The current price rally, which comes three weeks before the US elections, suggests that history may be repeating itself, potentially leading to further price appreciation as investor optimism grows.

#2 Sturdy demand for Bitcoin

For the first time since mid-2023, Bitcoin buy orders coincide with sell orders in the spot order books of various exchanges. Ki Adolescent Ju, founder and CEO of CryptoQuant, highlighted this development via X: “Bitcoin buy walls on all exchanges are now strong enough to neutralize selling barriers.”

This change represents a significant change compared to the trend observed since May 2021. “Data from the last cycle (2020-2022). This is the cumulative difference between quoted buy and sell volumes. From May 2021 until the end of the cycle, the selling walls were consistently thicker than the buying walls,” Adolescent Ju said.

#3 Surge in inflows of spot Bitcoin ETFs

Monday saw one of the highest-ever inflows for Bitcoin ETFs, totaling $555.9 million – the largest day of net inflows since June 3. This significant inflow of capital was spread among several major asset managers. BlackRock received $79.5 million, Fidelity $239.3 million, Bitwise raised $100.2 million, Ark Invest saw an inflow of $69.8 million, and Grayscale Bitcoin Trust (GBTC) saw an inflow of $37.8 million.

Nate Geraci, president of The ETF Store and host of the ETF Prime podcast, commented on these inflows via X: “Monstrous day for btc spot ETFs… $550 million in inflows. Now it’s approaching *$20 billion* net inflow in 10 months. Just ridiculous and calls into question any pre-launch demand estimates. This is NOT “degen retail” $$$ IMO. Advisors and institutional investors are still slow to adopt it.”

At the time of publication, the BTC price was $65,750.

Featured image created with DALL.E, chart from TradingView.com