Bitcoin’s recovery past $85,000 faces a demand test following a sharp decline in wagers on an additional Federal Reserve rate hike. A fresh post-payroll analysis indicates that the heaviest wave of forced buying occurred ahead of Friday’s jobs report, whereas Bitcoin experienced a retreat following the publication.
Around press time, Bitcoin traded at $85,276, marking a 0.83% increase over a 24-hour window. The Sunday price held underneath the $86,000 threshold achieved prior to the payroll figures.
For investors monitoring Bitcoin’s rebound, this discrepancy highlights a practical inquiry: who will maintain the upward momentum once the initial short squeeze concludes? Inflows into exchange-traded funds on Thursday delivered a positive signal, though incomplete figures for Friday leave the market’s reaction to the jobs data unresolved as the Monday U.S. session approaches.
The squeeze came before payrolls
An October 3 post-payroll study by Glassnode estimated that the likelihood of an extra quarter-point rate increase at the October 28 meeting dropped from 66% on September 28 to 22% by 15:00 UTC on October 2. This probability is derived from Glassnode calculations utilizing fed funds futures and the effective federal funds rate.
The timing of the most intense forced buying is telling. Glassnode documented $50 million in short liquidations occurring within a ten-minute span at 04:20 UTC on October 2, which was eight hours prior to the employment publication. By 15:40 UTC, Bitcoin traded over 1% lower than its price immediately before the release.
When climbing prices compel short sellers to exit their positions, they can generate added buying pressure. Once those positions are covered, keeping prices elevated depends on fresh buyers stepping in to absorb ongoing sell orders. Friday’s sequence suggests prudence when projecting an overnight price surge into enduring investor commitment.
Open interest—representing the total value of active futures contracts—expanded by $2.1 billion during the 24 hours leading up to the payrolls report, according to Glassnode data. Total positions also climbed roughly 2.5% when evaluated in coin terms. Subsequently, open interest contracted by $1.5 billion after continuing to climb for roughly one hour post-release.
While the dollar-value variation tracks overall exposure and is influenced by asset valuation, lost investment capital represents a distinct metric. The study’s timeline links growing positions to the price increase and their subsequent unwinding to falling prices, while leaving the root cause of the reversal undetermined.
The fund market offers an additional piece of data. U.S. spot Bitcoin exchange-traded funds registered net inflows totaling $102 million on October 1, according to flow tables from Farside Investors.
That day of positive flows followed net redemptions on Wednesday, demonstrating that institutional fund accumulation had resumed prior to the employment numbers. This provides the recovery with more substance than what a short-covering rally alone would indicate. Nevertheless, Thursday’s data reflects activity prior to the report, meaning Friday’s reaction must be evaluated separately.
Sustained inflows would reinforce Thursday’s evidence across subsequent sessions, showing whether investors continue deploying capital in the wake of the data release. Conversely, renewed redemptions would frame that single positive day as a recovery grappling for consistent fund backing.
Market participation extends beyond fund subscriptions. In its September 30 market report, Glassnode estimated combined spot-exchange and U.S. spot-ETF trading volume at roughly $6.4 billion daily, sitting near the lower bound of its range since the launch of the ETFs. This pre-payroll evaluation serves as a historical baseline for determining whether market activity broadens.
Trading volume measures transaction counts, which include repeated trades. An uptick would signify heightened activity, whereas fund flows offer an independent metric tracking subscriptions and redemptions. Evaluated alongside price action, these metrics help differentiate broader market participation from a price advance driven primarily by the closure of futures contracts.
Monday tests the path from policy relief to buying
The most recent policy action enacted by the Fed was a rate hike. Its September 16 announcement bumped the target range up by a quarter of a percentage point to 3.75%-4%. Lower expectations for an October hike keep that prior increase intact, meaning any rate reduction would necessitate a separate policy resolution.
The September employment report, published on October 2, indicated 29,000 payroll additions alongside a 4.2% unemployment rate. The Bureau of Labor Statistics characterized both metrics as showing little change. A slower pace of hiring can give central bankers a rationale for patience, making the report pertinent to upcoming policy choices even though September’s increase remains the active baseline.
Longer-term yields present an additional obstacle. Glassnode’s intraday figures from Friday showed short-term yields declining while long-term yields ticked upward, with the ten-year yield hovering near 5.2%. This divergence is significant because diminished expectations for further Fed rate hikes can exist alongside elevated long-term borrowing expenses.
For Bitcoin, the ultimate impact hinges on investor reactions. A more favorable outlook regarding the upcoming policy meeting might encourage increased exposure. Whether that translates into enduring buying pressure must be observed directly in the market, alongside the financing constraints market participants continue to encounter.
The Institute for Supply Management’s September services report is slated for release on Monday, October 5, at 10:00 a.m. ET. The preceding August survey combined a headline PMI reading of 55.4 with an employment index of 47.8 and a prices index of 72.6—signaling expanding overall activity, contracting employment, and widespread input-cost pressures.
Such a mix makes the upcoming report’s specifics just as important as the headline figure. Sluggish employment paired with easing cost pressures could strengthen the case for monetary policy patience. Conversely, persistent inflation or robust economic activity could complicate that narrative. Consequently, the services data provides a fresh benchmark for assessing the rate outlook derived from the payrolls report.
Upcoming U.S. ETF trading sessions will demonstrate whether fund investors persist in buying as the market digests this macroeconomic environment. Timing is critical: flow data published after the release can expand upon the Thursday inflow figures, while a fully reported Friday ledger will clarify the immediate market response.
Bitcoin held above $85,000 in Sunday’s figures, though it remained shy of its pre-payroll region near $86,000. Maintaining a recovery toward that level backed by continuous fund inflows and stronger spot market participation would alleviate worries over lagging demand. Another rejection lacking these supporting indicators would amplify those concerns. Together, these observations will supply investors with more concrete proof of follow-through than a simple drop in projected rate-hike probabilities.
Frequently Asked Questions
What was Bitcoin’s price and recent performance around the time of the report?
Bitcoin was trading at $85,276 near press time, representing a 0.83% gain over a 24-hour period, though its price stayed below the $86,000 mark achieved before the payrolls report.
How did Fed rate-hike expectations change ahead of the payrolls release?
Glassnode estimated that the probability of an additional quarter-point rate hike at the October 28 meeting dropped from 66% on September 28 down to 22% by 15:00 UTC on October 2.
What role did U.S. spot Bitcoin ETFs play in the market movement?
U.S. spot Bitcoin ETFs logged net inflows of $102 million on October 1 following Wednesday redemptions, though incomplete Friday figures left the broader fund response to payrolls open heading into the Monday U.S. session.
What was the status of trading volume and futures open interest prior to payrolls?
Combined spot-exchange and U.S. spot-ETF trading volume sat at roughly $6.4 billion daily—near the lower end of its range since ETF launches. Meanwhile, open interest rose by $2.1 billion in the 24 hours before payrolls before dropping $1.5 billion post-release.
