Bitcoin’s latest surge is fueled by institutions and steady on-chain demand rather than speculation, according to new data from Glassnode.
In the Oct. 8 edition of its “The Week On-chain” newsletter, the analytics firm said Bitcoin’s surge to a new all-time high of nearly $126,000 earlier this week was fueled by strong ETF inflows and steady accumulation by smaller market players.
The move pushed Bitcoin into further price discovery before consolidating near $122,500 on Wednesday.
ETF demand returns
Glassnode said more than $2.2 billion was invested in spot bitcoin ETFs in the United States in a single week, marking one of the largest waves of institutional buying since April.
These inflows reversed the slight redemptions observed in September and helped absorb a large part of the supply available on the exchanges.
The company noted that the fourth quarter has historically been the most favorable season for Bitcoin, as professional investors often rebalance their portfolios toward higher-risk assets such as cryptocurrencies and small-cap stocks.
Sustained demand for ETFs, he adds, could continue to anchor prices as the end of the year approaches.
Small Holders Drive Accumulation
On-chain data from Glassnode shows that mid-tier holders, or wallets holding between 10 and 1,000 BTC, were the main buyers driving the latest surge.
These accounts apparently steadily increased their balances while the largest whales made moderate profits, creating what the company described as a “more organic accumulation phase.”
Nearly 97% of circulating supply is now profitable, a level that generally marks recent bull cycles but does not yet show signs of exhaustion.
The report highlighted the $117,000 to $120,000 area as a key area of on-chain support, with around 190,000 BTC having last traded there – a price range where new buyers can step in if markets pull back.
Leverage adds a note of caution
While Glassnode described market conditions as “robust but maturing”, it warned that forward open interest rates and funding rates have both risen sharply. He noted that annualized funding now exceeds 8%, suggesting a build-up of leveraged long positions that could increase fragility in the near term.
Nonetheless, Glassnode argued that profit taking remains in check relative to prior market highs, indicating that investors are rotating holdings rather than rushing to exit.
A structurally strong market
Overall, Glassnode said bitcoin’s structure remains strong, supported by institutional demand, significant liquidity and widespread accumulation.
The firm concluded that as long as ETF inflows persist, bitcoin’s rally could extend further into the fourth quarter, solidifying its position as the most structurally supported uptrend in years.
