Bitcoin’s attempt to build a recovery above $85,000 is facing a test of investor demand after US payroll data reduced expectations for another Federal Reserve rate increase, but the cryptocurrency failed to hold the area it reached before the report.
According to CryptoSlate, the market’s strongest burst of forced buying came before the employment figures were released, while the response afterward was less convincing. US spot Bitcoin exchange-traded funds recorded a positive flow session before payrolls, but incomplete figures for Friday left open whether investors continued buying once the data was public.
Bitcoin was recently quoted at $85,276 in the source snapshot, up 0.83% over 24 hours. That was below the roughly $86,000 level seen before the payroll release, raising the question of whether the advance can attract fresh demand rather than rely mainly on the closing of bearish futures positions.
Short covering delivered the first surge
Glassnode’s Oct. 3 analysis showed a sharp decline in the market-implied probability of another quarter-point Federal Reserve rate increase at the Oct. 28 meeting. Its estimate fell from 66% on Sept. 28 to 22% by 15:00 UTC on Oct. 2, based on calculations using fed funds futures and the effective federal funds rate.
The most notable liquidation activity preceded the employment report. Glassnode recorded $50 million in Bitcoin short liquidations within 10 minutes at 04:20 UTC on Oct. 2, approximately eight hours before the jobs figures. By 15:40 UTC, Bitcoin had fallen more than 1% below its immediate pre-release level.
Short liquidations can add temporary buying pressure because traders with bearish positions are forced to purchase Bitcoin to close them. That buying can lift prices, but it does not necessarily represent new long-term investment demand. Once the positions are closed, other buyers must absorb available selling if the higher price is to hold.
Futures positioning also expanded ahead of payrolls. Open interest, which measures the value of outstanding futures contracts, increased by $2.1 billion over the 24 hours before the report. Positions rose by about 2.5% when measured in Bitcoin. After the release, open interest dropped by $1.5 billion, following roughly an hour of further growth.
The dollar value of open interest is influenced by changes in Bitcoin’s price and should not be treated as the same measure as investment capital gained or lost. Still, the sequence—rising exposure before the report and declining exposure as prices weakened afterward—makes it difficult to view the initial move as proof of sustained demand.
ETF flows provide a separate demand signal
The US spot Bitcoin ETF market offered some evidence that buyers were returning before the employment data. Farside Investors’ flow table showed net inflows of $102 million on Oct. 1, following redemptions on the previous day.
That inflow matters because ETF subscriptions represent a different form of market participation from futures short covering. It indicated that fund demand had improved before payrolls, giving the recovery a support factor beyond forced position closures. However, the reported inflow covered a session before the jobs release and therefore could not establish how investors reacted to the data itself.
The unresolved Friday figures are important for interpreting the move. Continued inflows after payrolls would suggest that investors were willing to commit money despite Bitcoin remaining below its pre-release area. Renewed outflows would place the earlier positive session in a more cautious context.
Trading activity was already subdued in Glassnode’s Sept. 30 market study. Combined spot-exchange and US spot-ETF volume stood at about $6.4 billion per day, near the lower end of its range since the ETFs launched. Volume counts transactions, including repeated trading, while ETF flows measure subscriptions and redemptions. Examining both can help show whether participation is broadening or whether the price move is being driven mainly by derivatives positioning.
Monday data will test the rate narrative
The latest observed Federal Reserve decision was a quarter-point rate increase announced on Sept. 16, which lifted the target range to 3.75%-4%. Lower odds of another increase at the October meeting do not reverse that decision; a cut would require a separate policy action.
The September employment report, released on Oct. 2, showed payroll gains of 29,000 and an unemployment rate of 4.2%. The Bureau of Labor Statistics described both figures as little changed. Slower hiring can support a case for policy patience, but the effect on Bitcoin still depends on how investors balance expectations for short-term rates against broader financing conditions.
Longer-term yields remained a complication. Glassnode’s Friday intraday study found short-term yields falling while long-term yields rose, with the 10-year yield near 5.2%. Thus, a lower probability of another near-term Fed hike can coexist with elevated longer-term borrowing costs.
The Institute for Supply Management’s September services report is scheduled for Monday, Oct. 5, at 10:00 a.m. ET. The previous August survey showed a headline PMI of 55.4, an employment index of 47.8 and a prices index of 72.6—indicating expanding activity, contracting employment and strong input-cost pressure. The new report will provide another check on whether the payroll-driven policy outlook is holding.
The next US ETF sessions will be equally important. Repeated inflows, together with stronger spot participation, would provide more evidence that Bitcoin’s recovery has follow-through. Another rejection below the pre-payroll area without that support would leave the demand question unresolved.
Moneyiar market picture
Moneyiar data at 09:49 on Oct. 5, 2026, showed Bitcoin at $85,941.07, up 0.75% over 24 hours and 3.91% over seven days. Bitcoin ranked first by market capitalization in the supplied market data.
Among the other listed assets, Lighter was priced at $3.8505, up 5.80% over 24 hours but down 12.22% over seven days. RedStone stood at $0.1721, down 2.43% over 24 hours and up 7.57% over seven days. Propy was at $0.3657, up 0.68% over 24 hours and 4.39% over seven days. These figures describe the market at the stated time and do not resolve whether Bitcoin ETF demand persisted after payrolls.
