An analyst has stated that Bitcoin’s recent price increase is largely driven by ETF flows and futures market open interest, not actual network usage. Despite a surge in Bitcoin’s price, on-chain activity has not increased, suggesting external market factors are influencing the price. Sharp inflows into Bitcoin ETFs and rising open interest contrast with declining network metrics, indicating potential concerns about the sustainability of the price rally.
An analyst has suggested the recent surge in Bitcoin prices is less about network activity and more about institutional inflows from Exchange-Traded Funds (ETFs) and increased open interest in futures trading. This comes amid a fascinating shift in attention, as recent events including a special dinner with President Trump for top holders of the TRUMP meme coin have sparked buying frenzy, only to see interest cool off afterwards. Analyst DonAlt voiced his concerns on X regarding the market’s behaviour, indicating a lack of sustainable buying power to support multiple narratives simultaneously.
Maartunn, from CryptoQuant, really drove the point home, describing the Bitcoin network as a “ghost town” currently. He emphasised that while there has been a notable upsurge in Bitcoin’s price, the on-chain activity simply hasn’t followed suit – pointing to external catalysts, like ETF inflows and futures market open interest, as the primary drivers of this price movement. It’s clear that the basic demand metrics aren’t reflecting the rising costs.
In his analysis, Maartunn employed a 365-day Moving Average for the network activity index, aiming to shed light on potential long-term trends. A review of data since 2015 shows that, typically, spikes in network activity go hand-in-hand with Bitcoin price increases. Strikingly, however, a divergence is visible from 2025 onward, where Bitcoin’s price soared but network growth came to a near halt, highlighting the absence of organic demand behind the current price trends.
Further data from Farside has revealed a significant boom in Bitcoin ETFs, with inflows rocketing from $381 million on April 21 to a staggering $917 million by April 23. This sharp rise has correlated neatly with Bitcoin’s price rally, which topped $94,000. Since their launch, U.S. Bitcoin ETFs have generated an impressive cumulative inflow of $37.7 billion, largely pointing to institutional market participation as a strong influence in recent trends.
Meanwhile, Bitcoin futures have also seen an increase in open interest, shooting up from $24 billion on April 20 to over $27 billion just four days later. This spike in open interest further underscores the argument that external factors are at play in the recent price hike.
On the flip side, data from IntoTheBlock illustrates a decline in crucial on-chain indicators. Network activity slipped by 0.94% in the last week, with active addresses falling 1.51%. Additionally, a considerable drop in zero-balance addresses by 12.59% signals increasing inactivity among users. This decline raises questions about sustainability and seems to point to market dynamics that aren’t reliant on strong user engagement within the network.
