Bitcoin (BTC) reached a new all-time high of $79,000 on May 3 after reports of diplomatic easing between the US and Iran fueled broad risk-on sentiment. The move marks a significant reversal from its dip to nearly $60,000 earlier in the year when the Strait of Hormuz was closed.
"The rally was driven almost entirely by demand in perpetual futures markets, while spot demand remained negative throughout the period," said Julio Moreno, head of research at CryptoQuant. "Historically, such configurations lack the structural foundation required to sustain price gains."
The divergence is stark. While perpetual futures demand drove the price up, CryptoQuant’s Bull Score Index, which measures overall on-chain health, fell from 50 to 40 in April, entering bearish territory. This suggests the price gains are speculative and not supported by fundamental accumulation. Friday saw a strong inflow of nearly $630 million into US spot Bitcoin ETFs, but this was not enough to flip the broader on-chain demand trend positive.
The key level to watch is the $79,000 zone. A sustained break could open the door to targets of $86,000 and higher, according to some analysts. However, without a shift toward spot-driven demand, the market remains vulnerable to a sharp correction if the highly-leveraged futures positions unwind.
The surge in Bitcoin's price followed President Trump's announcement of a plan to partially reopen the Strait of Hormuz, a critical waterway for global oil supply that Iran had closed in late February. This de-escalation of geopolitical tensions prompted a fall in oil prices and a rally in risk assets, including equities and crypto.
Despite the new peak, on-chain data points to significant weakness under the surface. The lack of spot buying indicates that long-term holders and new investors are not participating in the rally; instead, it is dominated by traders using leverage. This type of rally is often short-lived and prone to sharp reversals.
Traders are also watching liquidity maps, which show a build-up of liquidation levels below the current price. "Starting to see a build of liquidity form below, but a take of the high liquidity and using that to dump," commented trader Crypto Tony, highlighting the risk of a "liquidity grab" to the downside.
The event has increased confidence in prediction markets. The probability of Bitcoin reaching a new all-time high by December 31, 2026, rose to 17.5% from 16% a day prior, according to data from one market.
This article is for informational purposes only and does not constitute investment advice.
