Bitcoin Rally Sustainability Hinges on Continued ETF Demand

Bitcoin's recent surge past $86,000 was fueled by spot ETF inflows, short covering, and options dealer hedging. While ETF buying remains a consistent driver, other temporary factors like short squeezes and options-related hedging have largely concluded. Analysts note that the average ETF investor has returned to profitability, with Bitcoin reaching $87,397 earlier this week. The market's ability to maintain these gains now depends on whether sustained ETF inflows can offset potential selling pressure from traders closing leveraged positions.