Bitcoin recorded unprecedented inflows of $3.55 billion last week, coinciding with its price nearing historical highs as investors withdrew from short products. Total inflows across the broader digital asset landscape reached $5.95 billion, marking the highest weekly inflows ever recorded.

CoinShares suggests this substantial uptick may reflect a lagged response to the FOMC’s interest rate cuts and the recent poor employment data from the ADP Payroll report, along with concerns over the stability of the U.S. government due to the shutdown. The resulting price increase has raised the total assets under management (AuM) in digital assets to an impressive $254 billion.

Investment Surge

The latest Digital Asset Fund Flows Weekly Report indicates a widespread bullish trend. Ethereum saw inflows of $1.48 billion last week, pushing its year-to-date total to a record $13.7 billion, nearly three times last year’s figures. Solana achieved a new weekly record with $706.5 million in inflows, totaling $2.58 billion so far this year. XRP attracted $219.4 million, while other altcoins experienced minimal activity.

Investment products focused on Sui, Chainlink, and Litecoin received inflows of $3.4 million, $1.5 million, and $1.2 million respectively. Cardano also secured a modest inflow of $0.5 million during the same timeframe, unlike multi-asset products, which faced a weekly outflow of $23.5 million.

Recent inflows reflect a broad regional optimism, primarily driven by the United States, which welcomed $5.0 billion in inflows, a new record for the week. Switzerland posted $563 million, while Germany recorded its second-largest inflow at $312 million.

October Projections and Market Trends

Looking ahead, QCP Capital has forecasted a cautiously optimistic outlook for Bitcoin as the market nears a potential breakout in October. Their latest insights suggest that major holders appear to have either finalized their asset rotations or are maintaining positions while awaiting momentum.

Despite traders’ chase of the ongoing rally, the funding rates for BTC-PERP on leading exchanges remain high at 35% on Deribit and 29% on Hyperliquid, suggesting aggressive market positions. However, heightened perpetual funding rates come with the risk of sharp liquidations, as witnessed two weeks prior when nearly $3 billion in long positions were liquidated, creating opportunities for institutional entry.

In the options market, traders shorting end-October calls have raised their strike prices to 126k-128k alongside the spot price’s increase. Although some analysts interpret Bitcoin’s recent surge as excessive without definitive catalysts, supportive market narratives continue to prevail. Bitcoin’s appeal as a safe haven is resurfacing amidst the U.S. government shutdown, outperforming even gold, while the historically bullish sentiment seen in October adds further momentum.

Additionally, balances on centralized exchanges have fallen to their lowest levels in six years, presenting yet another bullish signal.