Shares of IBIT jumped 4.4% to $45.20 on September 18, as Bitcoin rallied on falling long-term Treasury yields, a wave of forced short covering, and renewed institutional demand through spot ETFs — just two days after the Federal Reserve delivered its first rate hike since 2023.

  • The Fed Hiked, and Bitcoin Rallied Anyway — Here's Why That Matters. The FOMC voted 12-0 to raise the federal funds rate by 25 basis points to a target range of 3.75%–4%. Normally, higher rates punish speculative assets like Bitcoin. But the market had priced this in for weeks, and the unanimous vote removed uncertainty. The S&P 500 rose after Wednesday's announcement, and crypto followed suit. The dot plot shows FOMC members see one more hike this year, but the clarity itself gave traders confidence to re-engage. For IBIT holders, a market that can absorb a rate hike and still push higher signals that the floor under Bitcoin may be firming.

  • Short Sellers Got Squeezed — Again — and That's a Double-Edged Sword. Analyst Axel Adler Jr. noted that over the past 24 hours, Bitcoin rose from $76,300 to $77,400, with the vast majority of liquidations being short positions.

The liquidation pressure oscillator climbed to +54.52, indicating continued short covering. This forced buying pushes prices up fast, but the current rally remains driven by short squeezes, with buying dominance only recently emerging. If fresh spot demand doesn't replace the mechanical squeeze, the move fades. IBIT's price action over the next few sessions will reveal whether real buyers are stepping in.

  • Institutional Flows Tell a Stronger Story Than the Headlines. Bitcoin ETFs saw a $3.8 billion September inflow surge, reversing the 2026 deficit.

BlackRock's IBIT alone attracted $3.575 billion over the past 30 days, reinforcing its dominance. Cumulative net inflows since launch now stand at $63.94 billion. But flows remain volatile — a $731 million inflow day on September 3 followed a $236 million withdrawal on September 1, showing how fast sentiment can reverse. IBIT's net assets sat at roughly $43.4 billion at midyear, down from $67.4 billion at year-end 2025, a reminder that price declines punish the fund's asset base even when new money arrives.

  • The Macro Backdrop Is Better, But Fragile. Treasury's expanded bond buyback program has helped compress long-term yields, reducing the appeal of holding low-risk government debt relative to riskier assets like Bitcoin.

The Fed's median projection calls for core inflation of 3.4% by year-end, and markets are pricing in one more hike in December. If yields resume climbing or oil shocks reignite inflation fears, the same forces lifting IBIT today could reverse sharply tomorrow.