- CryptoQuant warns Bitcoin‘s April rally was driven by speculative futures demand, not fundamental spot interest.
- A divergence between rising prices and falling spot demand historically signals a setup for a prolonged price decline.
- The firm’s Bull Score Index has dropped into a bearish zone, mirroring conditions at the start of the 2022 bear market.
- Bitcoin is currently trading near $77,000 after correcting from a $79,000 peak last month.
A recent report from crypto analytics firm CryptoQuant suggests Bitcoin’s strong April rally may be a precursor to a significant downturn. The firm’s data indicates the price surge was fueled by speculative futures traders, not by fundamental spot buyers.
Bitcoin gained around 20% in April, rising from $66,000 to a peak near $79,000. CryptoQuant stated this rally “was driven entirely by growth in perpetual futures demand,” according to a report published Thursday. Meanwhile, spot demand for the cryptocurrency contracted throughout the same period.
This divergence is a clear on-chain signal that gains are speculative rather than structural. Consequently, the current setup mirrors the pattern seen at the outset of the 2022 bear market.
CryptoQuant noted that scenario “ultimately preceded a sustained price decline.” The firm’s Bull Score Index fell from 50 to 40 in April despite the price increase, indicating conditions are “getting bearish.”
This analysis contrasts with a note from Bitwise Chief Investment Officer Matt Hougan. He argued Tuesday that buying from the Bitcoin treasury company Strategy has been the “single biggest factor” in the recent rally.
Bitcoin is currently trading around $77,000. CryptoQuant concludes that history suggests this setup carries meaningful downside risk for the market.
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