CryptoQuant Analyst: Bitcoin's Rally to $79,000 Driven by $1.1B Short Squeeze, Not Spot Demand

Bitcoin's recent push to $79,000 was predominantly driven by a massive wave of short liquidations in the derivatives market rather than organic spot demand, according to CryptoQuant contributor Carmelo Alemán. Total short liquidations across the market exceeded $1.1 billion.

«BTC's Rally Was a Short Squeeze. As long as price depends more on derivatives than on solid spot validation, the structure will remain vulnerable to reversal» — CryptoQuant.com (@cryptoquant_com), original post

Short Squeeze Mechanics: Leverage, Not Real Buyers

Alemán observed that Bitcoin climbed from $76,351 to $79,447, registering a 4.05% gain. During this move, open interest surged from $24.88 billion to approximately $28 billion — a dynamic the analyst characterized as evidence of increasing leverage in the futures segment.

The liquidation data was heavily skewed toward short sellers:

• Bitcoin short liquidations — approximately $607.9 million;
• Ethereum short liquidations — approximately $580.9 million;
• Total long liquidations — only about $111 million.

This disparity confirms a classic short squeeze mechanism: prices rose as traders were forced to close losing short positions, rather than through sustained buying pressure. Alemán warned that such a structure leaves the market fragile, with correction risk persisting as long as the rally depends solely on futures activity.

Why This Matters

The distinction between spot-driven and derivatives-driven rallies is critical for assessing trend sustainability. Spot purchases reflect genuine investor interest in holding an asset, whereas moves powered by liquidations can reverse just as rapidly as they begin. Understanding this distinction helps traders and investors gauge the durability of any price movement.

Meanwhile, Glassnode highlighted persistent bullish positioning among large derivatives traders.

«Whales on Hyperliquid have been longing the breakout of the range. Their conviction and long positioning have steadily increased over the past two months, signaling strong bullish sentiment among big perp players» — glassnode (@glassnode), original post

April Shaping Up as a Standout Month

April 2026 is on track to become one of Bitcoin's strongest months in over a year. CoinGlass data shows a 14.3% gain over 24 days — the best monthly performance since November 2024.

Since early February, Bitcoin has added roughly $20,000 in value and approached the upper boundary of a multi-month trading range. At the time of writing, BTC was trading near $77,500.

Institutional investors are providing additional tailwinds. Over the past five trading days, U.S. spot Bitcoin ETFs accumulated approximately 19,000 BTC. Bitwise's head of European operations André Dragosch noted that this volume is roughly nine times the amount of newly mined coins during the same period.

«US spot bitcoin ETFs have purchased 18,991 $BTC over the past 5 trading days. That's 9x times the new supply in that period. Institutional demand for bitcoin is clearly accelerating» — André Dragosch, PhD (@Andre_Dragosch), original post

Long-Term Signals and Price Targets

MN Trading founder Michaël van de Poppe drew attention to Bitcoin's Sharpe Ratio, which measures risk-adjusted returns. The metric has dropped to levels historically associated with broad market bottoms.

«Bitcoin is a generational opportunity, right now. The Bitcoin Sharpe Ratio has hit a level that's comparable to any broad market bottom» — Michaël van de Poppe (@CryptoMichNL), original post

In previous cycles, comparable Sharpe Ratio readings preceded gains of 120–135% over 12 months and 400–800% over two years. Based on this pattern, van de Poppe reiterated the possibility of Bitcoin reaching $100,000 in Q3 2026, with a new all-time high in the months that follow.

In the near term, the analyst sees room for a move to $86,000, which could trigger a 30–40% rally in altcoins.

«I think this leg has enough room to continue to $86K, and Altcoins to run» — Michaël van de Poppe (@CryptoMichNL), original post

Key Price Levels to Watch

Van de Poppe identified $75,000 as critical support — holding above this level is essential for maintaining upward momentum. Trader Daan Crypto Trades emphasized the $80,000 zone as the threshold bulls must breach to turn the tide on higher timeframes.

Immediate support levels sit at $72,000 and $65,000. On April 24, the Fear and Greed Index climbed to 46 — its highest reading since January.