Bitcoin climbed to $79,000 before pulling back, and market researchers are split over what powered the move. CryptoQuant said the rally showed a clear gap between higher prices and softer spot demand, a pattern it described as one of the strongest on-chain signs that speculation, not structural demand, was driving the advance. In its view, April trading was led mainly by short-term participants, while longer-horizon investors stayed largely inactive.
Spot demand weakened while price moved higher
According to CryptoQuant, the rise in Bitcoin was not matched by stronger spot buying. That matters. When price appreciation is supported more by derivatives activity than by spot demand, the move can be less stable and more vulnerable to reversals. The firm said the divergence between price growth and falling spot demand was among the most evident on-chain signals that the rally had a speculative base rather than a structural one.
The report also compared the latest pullback from the $79,000 peak with earlier periods when upside driven mainly by derivatives was followed by quick declines. At the time cited in the article, Bitcoin was trading just below $77,000, up 2.1% over the previous 24 hours.
CryptoQuant sees a pattern similar to early 2022
Another part of the report drew a parallel with the early stage of the 2022 bear market. In that period, demand in derivatives increased while buying activity in the spot market faded, and an extended decline followed. CryptoQuant said that, historically, this combination has signaled meaningful downside risk when Bitcoin is already in a bear-market regime.
The firm also pointed to its Bull Score Index, a sentiment gauge that dropped from 50 to 40 in April. A reading back at 40, the report said, has historically been associated with stretches of continued price weakness and a market tone that is turning bearish.
Bitwise points instead to ETF inflows and institutional buying
Bitwise offered a different reading. In a note published Tuesday, Chief Investment Officer Matt Hougan said Bitcoin’s recent strength was driven mainly by institutional buying. He highlighted strong ETF inflows totaling $3.8 billion since March 1, along with renewed participation from major long-term investors, as the key forces behind the rally.
Hougan said several elements were behind the move higher, including sizable ETF inflows and the return of long-term investors, but he identified institutional buying as the leading factor. The contrast between the two views leaves the market with two competing explanations for the same rally: one centered on speculative trading, the other on sustained institutional demand.