Bitcoin's record-breaking surge is driven by institutional capital and sustained on-chain demand rather than speculative trading, according to Glassnode's latest analysis.
In their October 8 "The Week On-chain" report, the blockchain analytics firm revealed Bitcoin's climb to new all-time highs around $126,000 was propelled by substantial ETF inflows and consistent accumulation from smaller investors.
The rally pushed Bitcoin into unprecedented price territory before stabilizing near $122,500 mid-week.
ETF Inflows Rebound Strongly
Glassnode reported over $2.2 billion flowing into US spot Bitcoin ETFs within a single week, representing one of the most significant institutional buying waves since April.
These substantial inflows reversed September's minor outflows and absorbed considerable exchange supply.
The analysis highlighted Bitcoin's historical fourth-quarter strength, as professional investors typically rebalance toward higher-risk assets including cryptocurrencies and small-cap stocks.
Sustained ETF demand, the firm added, could continue supporting prices through year-end.
Retail and Mid-Tier Investors Drive Accumulation
Glassnode's on-chain metrics indicate wallets holding 10-1,000 BTC have been primary buyers during the recent advance.
These investors have consistently increased holdings while larger whales took moderate profits, creating what analysts termed an "organic accumulation phase."
With 97% of circulating supply now profitable—typically indicating late-cycle conditions—the market shows no exhaustion signals.
The $117,000-$120,000 range was identified as crucial on-chain support, with approximately 190,000 BTC last transacted in this zone, potentially attracting buyers during pullbacks.
Leverage Concerns Emerge
While characterizing market conditions as "robust but maturing," Glassnode warned about surging futures open interest and funding rates exceeding 8% annualized.
This suggests elevated leveraged long positions that could increase short-term volatility.
However, realized profits remain controlled compared to previous market peaks, indicating strategic portfolio rotation rather than panic selling.
Structurally Sound Bull Market
Glassnode concluded Bitcoin's foundation remains strong, supported by institutional demand, deep liquidity, and broad-based accumulation.
The firm maintains continued ETF inflows could extend Bitcoin's rally through Q4, representing the most structurally sound uptrend in recent years.