Bitcoin jumps over 5% to $81,450 in a week amid strong ETF inflows: What’s driving the rally?

As per the latest business developments, Bitcoin peaked just above $81,804 in early trading on September 21, but trimmed some of those upside to trade at $81,452.23 (09:14 IST), up 1.42 percent during the past 24 hours and a 5.09 percent gain over the week despite a hawkish The US central bank and the Senate setback for the CLARITY Act, while steady ETF flows improved demand.

Crypto markets have shown notable resilience despite a difficult macro and policy backdrop.

"The move was supported by regulatory developments, including an SEC exemption for tokenised-stock trading and new CFTC crypto proposals sent for White House review, improving market sentiment. A sharp swing in crude prices additionally helped trigger a short squeeze," Prateek Gupta, Head of Business at Mudrex, stated.

US spot Bitcoin ETFs finished the week with a marginal $6.2 million net inflow, as heavy midweek redemptions were offset by firm buying on Thursday and Friday. Ether ETFs were weaker, ending the week with roughly $140 million in net outflows.

Riya Sehgal, Research Market observer at Delta Exchange, estimates that Bitcoin has technically reclaimed all major 4-hour moving averages, but the $81,800-$82,500 region stays the key resistance zone. A sustained break above this area could open the way toward $83,000-$84,000, while $80,000 stays the first important backing.

"Overall, the recovery stays constructive, but with Treasury yields still elevated, policy uncertainty lingering after the CLARITY Act setback, and leverage still high, the next move is likely to depend on whether BTC can convert the $82,000 area from resistance into backing," Sehgal stated.

According to CoinDCX, the top gainers for the day were NEAR Protocol and Venice Token with a climb of over 22 percent each, followed by Avalanche by 17.21 percent and Jupiter by 16.09 percent. The cryptos that posted losses for the day include MemeCore with 7.11 percent, JUST with -2.76 percent and Midnight with 1.52 percent. Market sentiment stays greedy as the Crypto Fear & Greed Index rises to 72.

Here's how major cryptocurrencies moved during the past 24 hours.

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Nischal Shetty, Founder of WazirX, believes that rather than triggering a sell-off, the conclusion of the highly anticipated The US central bank meeting removed macro uncertainty, sparking a relief surge fuelled by institutional demand.

"The current macro backdrop looks moderately supportive for crypto, primarily because traditional risk sentiment is constructive and some inflationary pressure appears to be easing. For crypto, resilience in equities is generally supportive because it suggests market participants are still willing to hold elevated-risk assets. A meaningful slide in oil reduces some of the inflation pressure that has been concerning markets," Shetty stated.