Bitcoin Hovers Around $97,000 But This Is A 'Fragile Rally,' Analyst Warns

Bitcoin‘s BTC/USD recovery to $97,000 shows concerning signs of weakness in on-chain metrics despite strong ETF inflows, suggesting the rally may be more fragile than it appears.

What Happened: According to Vizart, on-chain analyst at Glassnode, the rally was “spot driven mostly, but it didn’t ignite or incentivize the perpetual market.”

During their latest Bitcoin Intelligence Report on the 21st Capital podcast published on April 30, he characterized the current market structure as a “fragile rally” that lacks crucial confirmation signals typically seen in sustainable uptrends.

The analysis highlights that while Bitcoin has rebounded significantly from its recent lows near $74,000, several key metrics suggest caution.

Most notably, the funding rate in perpetual futures markets remains below the critical 0.01% threshold that historically signals strong bullish momentum.

“The trend in the funding rate is not showing a strong bounce back,” Vizart noted.

This divergence between spot buying and derivatives market sentiment is particularly concerning, as sustainable rallies typically show alignment between these sectors.

The “long side premium per hour” metric, which measures how much traders are willing to pay to maintain leveraged long positions, has declined significantly from December 2024’s peak of over $1 million per hour to near-zero levels.

The analysis also examined Bitcoin ETF flows, which showed strong inflows after Bitcoin broke above $93,000.

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Rather than viewing this positively, Vizart suggested this pattern resembles retail FOMO behavior. “So-called smart money or institutional investors are behaving as retail investors.”

Also Read: Bitcoin Is A Commodity Like Gold, Says Commerce Secretary Lutnick

Why It Matters: From a technical perspective, Bitcoin trades at a critical juncture near the cost basis of short-term holders around $93,000.

Historically, sustainable bull markets require prices to remain above this level for at least a month, while brief recoveries above this threshold followed by failures have characterized bear market rallies.

For investors, the analysts suggest patience may be warranted.

Absent a “positive comeback in macro in coming weeks,” a dip back into the $70,000s may be on the table, warned Vizart, who identified $71,000-$72,000 as a potential “golden time” for accumulation.

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