ETF inflows surged then reversed
US spot Bitcoin exchange-traded funds (ETFs) pulled in $2.65 billion in net inflows during September alone, the second-largest monthly total since October 2025, with the bulk of that demand arriving in the final two weeks of the month after the Federal Reserve raised rates at its September meeting.
However, with the October 28 decision now hanging over it, October ETF flows have turned to net outflows.
CME FedWatch data as of October 15 priced a rate hold at approximately 68% and a hike at approximately 32%. September’s Consumer Price Index came in at 3.7% year-on-year, above consensus, while core inflation stood at 2.6%.
The report notes that the 30-year Treasury yield has climbed to around 5.6%, a level it describes as a constraint on risk appetite.
Double bottom breaks down
Bitcoin’s Q3 recovery produced what technical analysts describe as a double bottom formation, with a neckline near $82,000. A sustained close above that level would typically signal continuation of the uptrend. Bitcoin’s most recent weekly close of $80,900 fell back below the neckline, leaving the pattern unconfirmed and the near-term direction unresolved.
The share of Bitcoin supply held in profit rose from 46% at the June low to approximately 69% currently, reflecting the scale of the Q3 rally. The report also notes that the last three Bitcoin market cycles saw the asset reach its cycle low between 513 and 542 days before the halving, a range that, applied to the April 2024 halving, would place the cycle trough in the period now passed.
Three paths for Q4
Nexo’s report sets out three scenarios for the remainder of the year. In the constructive case, the Fed holds rates at the October meeting, long-dated Treasury yields stabilise, and institutional demand through ETFs resumes, supporting a move above the $82,000 neckline.
In the consolidation scenario, which the report characterises as the current path, Bitcoin trades in a range while markets await clearer signals on rates and inflation.
The third scenario, described as the largest tail risk, involves a rate hike or unexpectedly hot inflation data triggering a risk-off move and unwinding a portion of Q3’s gains.
Featured image via Nexo.
