Bitcoin Hits $81,000 As ETF Inflows Fuel Rally

Bitcoin recorded a strong upward move on Tuesday, rising about three per cent to trade at $81,007.13. The world’s largest cryptocurrency outperformed the broader digital asset market, which posted a more modest 2.2 per cent gain, as renewed institutional demand and easing geopolitical tensions boosted sentiment.

Market analysts attribute the latest rally largely to sustained inflows into spot exchange-traded funds (ETFs) and aggressive accumulation by large holders, commonly referred to as whales.

The forces have continued to shape Bitcoin’s price trajectory, even as broader retail participation remains relatively subdued.

Data over the past month shows that wallets holding more than 1,000 BTC collectively accumulated approximately 270,000 BTC. At the same time, Bitcoin reserves on exchanges declined sharply to about 2.21 million BTC, marking their lowest level in eight years. This trend suggests a tightening supply environment, as fewer coins remain readily available for trading.

Institutional demand has also strengthened through ETF channels.

On Monday, May 4, U.S. spot Bitcoin ETFs recorded net inflows of $532.21 million, extending a three-day streak of positive flows. BlackRock’s iShares Bitcoin Trust (IBIT) led the surge, attracting $335.49 million in fresh capital.

The sustained inflows signal a reversal from earlier outflows and point to renewed confidence among institutional investors. Analysts note that ETF demand has become a key driver of spot market activity, effectively absorbing available supply and providing support for higher price levels.

The upward momentum was further accelerated by a wave of short liquidations. Within a 24-hour period, approximately $125.82 million worth of bearish Bitcoin positions were wiped out as the price broke above the psychologically significant $80,000 mark. This forced traders who had bet against the asset to repurchase it, amplifying the rally.

Improved global risk sentiment also contributed to the bullish move. Reports of a ceasefire between the United States and Iran eased geopolitical concerns, encouraging investors to take on more risk. Analysts say this macro development added further support to Bitcoin’s upward trajectory.

From a technical standpoint, Bitcoin is now approaching a key resistance level around $82,024, represented by the 200-day Exponential Moving Average.

A sustained break above this threshold could pave the way for a move toward the next target near $84,586, based on Fibonacci projections.

On the downside, immediate support is seen within the $77,000 to $78,000 range, which previously acted as a breakout zone.

Maintaining price action above this level is considered crucial for preserving the current bullish structure.

Looking ahead, market direction is expected to be influenced by upcoming U.S. economic data, particularly the Non-Farm Payrolls report, as well as signals from the Federal Reserve. These macroeconomic factors could shape investor risk appetite and, by extension, Bitcoin’s short-term performance.

Overall, the recent rally reflects a combination of strong institutional buying, reduced market supply, and favourable macro conditions. Analysts caution, however, that Bitcoin must sustain its position above $80,000 to maintain momentum and confirm the continuation of the current uptrend.