Bitcoin’s $80,000 floor faces Friday inflation test as ETF inflows lose momentum

Bitcoin is maintaining the $80,000 area, which Glassnode identifies as the estimated average acquisition costs for US spot Bitcoin ETFs and publicly traded corporate treasuries. The cryptocurrency's price stability is being challenged as ETF inflows experienced a significant 95.6% decrease in a single day. Farside Investors recorded $526.7 million in net inflows on Oct. 19, followed by just $23.2 million on Oct. 20, marking a notable slowdown in new investment.

The market faces several critical economic tests this week. A $26 billion five-year TIPS auction occurred on Thursday, with flash PMIs and final University of Michigan inflation expectations scheduled for Friday. These events precede the Federal Reserve's Oct. 28 decision, which could significantly impact Bitcoin's price trajectory.

Cost Basis Support

According to Glassnode's Oct. 21 report, the Oct. 15 selloff pushed Bitcoin's price to near $80,100, briefly below the estimated ETF cost basis of approximately $81,500. Corporate treasuries in Glassnode's coverage hold coins at an average cost near $80,200. The largest block of spot bids on Binance was positioned near $80,000, though the selloff consumed most of this liquidity, with smaller bids reappearing by Oct. 20.

Bitcoin rebounded after briefly touching $80,100 near the $81,500 US spot ETF cost basis, remaining above the $77,600 True Market Mean.

Inflation Tests Ahead

The two-day period of Oct. 19-20 brought in $549.9 million combined in ETF inflows, highlighting the recent slowdown in new money entering the market. Glassnode notes that average spot ETF trading volume over 30 days is now less than a quarter of its level from a year earlier, while corporate treasury purchases since June have fallen to less than 10% of their November 2024 peak.

September CPI reached 3.7% annually, with the preliminary Michigan survey showing one-year inflation expectations at 4.7% and longer-term expectations at 3.5%. The Federal Reserve raised its target range to 3.75% to 4.00% in September, and 94 of 100 economists in a Reuters survey expect no change at the upcoming Oct. 28 meeting.

Breaking the Range

From the current $80,000 level, the True Market Mean sits 3% lower at $77,600, while overhead supply between $85,000 and $87,500 represents a 9.4% upside potential. This range contains coins purchased six to 12 months ago averaging near $86,700 and modeled futures liquidations clustering between $85,000 and $87,000.

If inflation expectations remain at or below preliminary readings, with easing PMI price components, falling two-year yields, and a stable or weaker dollar, Bitcoin could test the $85,000 to $87,500 range. Conversely, hotter readings could push yields and the dollar higher, potentially testing the replenished bids below $80,000 if ETF flows turn negative.

Bitcoin has demonstrated resilience near institutional cost bases, but Friday's inflation data will determine whether this demand can overcome the overhead supply before the Federal Reserve meets next week.