Bitcoin ended the third quarter with its strongest quarterly performance since the final three months of 2024, as renewed demand for US spot exchange-traded funds helped it recover from its yearly low.
The cryptocurrency gained nearly 43%, rising from $58,562 at the start of July to $83,621 by the end of September, according to CoinMarketCap.
Despite the rebound, it remained 33.7% below its all-time high of $126,198, reached on October 6, 2025.
The Crypto Fear & Greed Index reflected the shift in sentiment, climbing from mostly “fear” readings in July to around 74 by the end of September, within the “greed” range.
ETF Flows Reverse Second-Quarter Withdrawals
US spot Bitcoin ETFs recorded about $6.34 billion in net inflows during the third quarter, reversing nearly $5 billion in outflows from the previous three months.
The recovery accelerated as the quarter progressed. The funds attracted $172 million in July, $3.52 billion in August and $2.65 billion in September. Their largest daily inflow in August came on August 20, when the products added $606.3 million.
That period also brought a wave of liquidations in bearish leveraged positions. Short sellers were forced to buy Bitcoin to close their trades, adding to the upward move as the cryptocurrency gained more than $10,000 over several days.
ETF flows, however, do not provide a clean measure of directional institutional demand.
CoinShares Head of Research James Butterfill noted in the interview for Cointelegraph that some professional investors use BlackRock’s IBIT for basis trades, buying the ETF while shorting Bitcoin futures to capture the difference between spot and futures prices.
Corporate purchases provided another source of demand. Strategy resumed accumulating Bitcoin after a ten-week pause, purchasing 4,603 BTC for $369.7 million in late August.
Two subsequent acquisitions brought its holdings to 847,666 BTC by September 27. The next test is whether sustained spot and ETF demand can replace the temporary buying created by short liquidations.
“Aside from external macro numbers, I want to see sustained spot and ETF flows,” Nansen Senior Research Analyst Nicolai Sondergaard told Coindesk.
Treasury Yields Remain a Fourth-Quarter Constraint
The rally also followed the US Treasury’s decision to increase buybacks of longer-dated government debt, which pushed yields and the dollar lower in August.
Conditions subsequently tightened after the Federal Reserve raised interest rates in September and the ten-year Treasury yield climbed above 5%. Softer August inflation data later reduced expectations of another increase in October.
Nevertheless, elevated nominal and real yields remain a headwind by increasing the return available from lower-risk assets.
Near-term indicators are less uniformly bullish. Bitcoin remains in a bull market but is “showing signs of fatigue,” CryptoQuant Head of Research Julio Moreno wrote in a report cited by The Block. He placed initial support near the 365-day moving average at $80,000.
Other analysts identified $80,000–$82,000 as the main support area and $87,000–$88,000 as immediate resistance. Deribit data showed mixed short-term positioning, with traders alternating between demand for downside protection and exposure to a possible October rally.
Citi takes a more bullish view over a longer horizon. The bank raised its 12-month Bitcoin target from $82,000 to $113,000, citing renewed ETF demand, stronger crypto-market activity and a more supportive macroeconomic outlook. Its forecast assumes that investment flows continue at a slower but steadier pace.
The fourth-quarter outlook will depend on whether sustained ETF and spot demand can offset higher yields once the short-covering impulse fades.
This article was written by Tanya Chepkova at www.financemagnates.com.
Source: Finance Magnates
