With momentum flying high following last week’s price action, where bitcoin responded bullishly to the Federal Reserve’s 0.50 basis point rate cut, the momentum continued into the last full trading week of the month.

Bitcoin opened the week at $63,000, with upward momentum carrying it to a close around $66,200, marking a 5% appreciation over the week and a 10% increase over the past two weeks.

This double-digit price appreciation is largely attributed to the Federal Reserve’s higher-than-expected interest rate cut, which boosted both equity and crypto markets.

Currently, bitcoin is trading above all major moving averages on the daily timeframe and higher.

Open Interest Gains Upwards Momentum

Bitcoin’s open interest metric, which measures the amount of futures open on leveraged exchanges, currently sits at $35.6 billion, the highest level since late July, when open interest across aggregated futures exchanges reached $37.5 billion.

An increase in open interest is typically bullish for bitcoin, as it often confirms an upward trend in price when accompanied by rising prices.

Spot ETF Flows Skyrocket

Bitcoin spot ETFs saw five consecutive days of inflows this week, with the largest coming on Friday, as nearly half a billion dollars flowed into bitcoin. This marks the highest single-day inflow since early June.

The biggest inflows this week came from BlackRock’s IBIT fund, which saw over $184 million on Wednesday, and Cathie Wood’s ARKB fund, which led the pack with $203 million on Friday.

As of Friday, total net assets of bitcoin spot ETFs stand at $61.21 billion, just shy of the all-time high of $62.56 billion seen in early June, putting net assets only 1.52% away from overtaking the record. With bitcoin trading in the mid-$60,000s, this signals that investors and traders are accumulating in a largely range-bound environment, with bitcoin still off the highs of $74,000 reached in March.

Bitcoin Exchange Balance Continues To Downtrend

The bitcoin exchange balance metric, which tracks the amount of bitcoin available on exchanges, hit another new yearly low of $2.34 million this week, further supporting a bullish outlook. When bitcoin balances on exchanges decline, it often indicates that investors are moving bitcoin to cold storage, reducing the available supply on exchanges.

This creates the potential for a supply shock, which could drive prices higher in the future. Combined with the 5% appreciation this week, the shrinking exchange supply is a bullish sign for the bitcoin ecosystem.

Positive Insitutional Developments

This week, BNY Mellon’s approval from the SEC to offer bitcoin custody services could significantly bolster institutional confidence in bitcoin. As the oldest bank in the U.S., BNY Mellon’s entry into the crypto custody market underscores growing institutional adoption, likely driving further demand for bitcoin.

By bypassing the need to list cryptocurrencies as balance-sheet liabilities, BNY Mellon provides a secure and compliant pathway for institutional investors to access bitcoin, positioning it as a key player in the evolving crypto landscape, alongside giants like BlackRock and Fidelity.

Bitcoin October Seasonality

As we head into October, it’s important to review bitcoin’s seasonality, especially during an election year. According to Coinglass, October has historically been a strong month for bitcoin, with an average return of nearly 23% and a median return of close to 28%.

With ETF inflows rising and more favorable monetary policies from both the U.S. Federal Reserve and China’s central bank, the statistical data suggests a likely positive return for bitcoin in the coming month. Since 2013, bitcoin has only seen two negative Octobers, which suggests the odds favor the bulls heading into next month.

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