Bitcoin has fallen 4% from its high of $97,000 in three days, with the market under short-term pressure, while the surge in on-chain activity, originally seen as bullish, may hide reversal signals.
Surge in on-chain activity ≠ bullish price
On May 2, the number of active Bitcoin addresses surged to a six-month high of 926,000 addresses active simultaneously, with BTC price reaching as high as $96,951. It seemed like a bull market signal, but in reality, it was a 'false prosperity': the next day BTC fell nearly 2%, replaying the 'active address surge - price drop' pattern seen in early March.
Massive inflow into derivatives exchanges, lack of spot support
On the same day, about 5,000 BTC (worth approximately $484 million) flowed into derivatives exchanges. COINOTAG analysis indicates that this may mean the market is dominated by leveraged speculators rather than supported by long-term holders or spot buying. The surge in on-chain activity has not translated into price support, reflecting a typical 'bearish divergence.'
Is FOMO over? Retail enthusiasm has clearly declined
On May 3, the number of active addresses plummeted to 618,000, a two-week low, indicating a sharp reduction in market participation. Meanwhile, CryptoQuant data shows that net outflows from exchanges have stabilized, suggesting a decline in retail interest and weak buying. Compared to real spot demand on April 29, the current market is more about hesitation and wait-and-see.
$100,000 target has become more 'speculative'
Although the market generally sets $100,000 as a medium-term target, the decline in participation shown by on-chain data and hesitation in building positions at high levels may indicate a lack of upward momentum in the short term. Bitcoin is currently more likely in a 'consolidation topping' phase rather than accelerating upward.
Summary
The surge in on-chain data does not necessarily mean that an increase is happening, especially when it is driven by derivatives leverage, which requires greater caution against reverse risks. During a time of chaotic market signals, chasing highs should be approached with more caution, focusing on structural adjustment opportunities may be the correct stance before moving towards the $100,000 mark.
