Bitcoin reached $85,248 on Monday, its highest level since January 29, as markets shifted focus toward cooling oil prices and diplomatic discussions between the United States and Iran.
The move marked a significant recovery from eight months prior. Bitcoin’s weekly close on Sunday stood at $81,120, the highest since the week of May 4. The surge came as WTI crude oil fell below $94 per barrel on Monday, down from a spike above $100 per barrel last week.
Rekt Capital, a trader and analyst, characterized the moment as a “moment of truth” for the cryptocurrency. However, the firm identified a bearish divergence on the daily RSI, with lower highs for the indicator even as price reached higher highs, signaling a potential lack of underlying momentum.
Bitcoin has reclaimed its 50-week exponential moving average at $77,769, a level previously marked as a key prerequisite for upside continuation. The prior local high from May stood at $82,950, which the asset has now surpassed.
ETF Flows and Market Composition
US spot Bitcoin ETFs recorded $435 million in net inflows on Friday. The composition of inflows has shifted materially. According to CryptoQuant, the onchain analytics platform, “The key change is therefore not simply positive ETF activity, but a clear redistribution of flow leadership: IBIT went from dominating FBTC by nearly six times on September 3 to FBTC recording almost three times IBIT’s holdings netflow on September 18.”
Fidelity Investments’ Wise Origin Bitcoin Fund (FBTC) accounted for $310 million of inflows on Friday. BlackRock’s iShares Bitcoin Trust (IBIT) had previously dominated ETF inflows but has ceded leadership to Fidelity’s product.
Net crypto ETF inflows reached $159 million on Thursday, as the SEC and CFTC moved ahead with crypto-related policies.
Oil, Rates, and Geopolitical Factors
Jim Iuorio, CEO of JI Financial Strategies, attributed some of Bitcoin’s strength to oil price movements. “Perhaps markets viewed these actions as being dollar-negative, pushing money back into dollar hedges like gold and Bitcoin,” he said in a report dated September 16 for the CME.
US 30-year bond yields stood at 5.301% on Monday, down from a high of 5.425% on September 11. The yields remain at their highest levels since June 2004.
Geopolitical tensions between the United States and Iran have eased slightly. Majed Al-Ansari, Qatar Foreign Ministry spokesperson, said: “A lot of ideas have been thrown back and forth. This is just one iteration of these documents going back and forth, and we’re trying to bridge the gap and find the right moment to move forward.”
Donald Trump, US president, indicated openness to negotiations. “Wiping Iran out, letting them rot economically, or making a deal,” he said, adding he would “probably be open” to meeting with Iranian president Masoud Pezeshkian.
Saudi Arabia warned the EU that its refineries would not receive oil shipments in October due to shipping route disruptions, contributing to the broader oil market volatility.
Liquidations and Cost Basis
Crypto short liquidations totaled $600 million over 24 hours as Bitcoin climbed. Bitcoin’s 50-week RSI approached overbought territory, defined at a threshold of 70.
Corporate Bitcoin treasuries hold an average cost basis of $80,500, while US spot Bitcoin ETF investors average $85,638. The gap between these figures has narrowed as prices approached and exceeded the ETF investor cost basis.
Federal Reserve policy remains a factor for broader markets. The CME FedWatch tool showed 53% odds of a 0.25% rate hike in October and a 40% chance of a third 0.25% hike before year-end.
Mosaic Asset Company noted that strong economic growth could sustain equity market rallies even amid Fed rate hikes. “While investors are wondering what the Fed’s rate hiking cycle means for the S&P 500, evidence of strong economic growth should help keep the earnings outlook in tact. As long as the Fed is hiking at a measured pace that doesn’t call into question the growth outlook, the rally in equities can persist,” the firm said.
