In April, Bitcoin experienced a 20% increase, ascending from approximately $66,000 to its monthly zenith of $79,000. However, insights from the crypto data company CryptoQuant suggest that this rally might have been precarious at best.
According to their latest weekly report, which was published on Thursday, the entire surge in Bitcoin’s price was primarily propelled by an increase in demand within perpetual futures markets—a type of leveraged and speculative trading—while spot demand, indicative of real coin accumulation by market participants, consistently stayed negative throughout the month.
CryptoQuant’s metric for “apparent demand,” which evaluates the 30-day variation in estimated on-chain spot purchasing activities, did not register a positive value during this period of price elevation. This discrepancy signals potential trouble; rallies based on spot demand are underpinned by actual buyers acquiring Bitcoin, whereas those driven by futures markets involve traders leveraging predictions about price trends without holding the asset itself. When such leveraged positions unravel, it often results in significant downward pressure on prices.
This pattern is reminiscent of past market behaviors. The firm’s analysts liken the current situation to the precursor of the 2022 bear market, where a similar demand profile was observed: an increase in perpetual futures demand coinciding with a decline in spot apparent demand. This setup preceded a prolonged drop that ultimately resulted in Bitcoin losing about 70% of its peak value.
Bitcoin has started retreating from its April high, dropping to approximately $76,400—a movement that the firm interprets as being in line with the historically observed instability of rallies driven by futures rather than spot demand confirmation.
Adding to these concerns is a decrease in CryptoQuant’s Bull Score Index—integrating both on-chain and market indicators, ranging from zero to 100—from 50 to 40 during April. This decline took it back below the neutral threshold into what the firm deems bearish territory. The index had temporarily reached a neutral reading of 50 mid-April but receded as speculative activities peaked and waned.
While CryptoQuant refrains from forecasting an outright market downturn, their tone is one of caution: absent a change in apparent demand from negative to positive, any future efforts to surpass the $79,000 level would lack the on-chain support necessary for a lasting breakout.
Despite these warnings, users of Myriad—a prediction market managed by Decrypt’s parent company, Dastan—remain optimistic about Bitcoin’s near-term trajectory. They estimate a greater than 70% probability that its next move will be an ascent to $84,000 rather than a descent to $55,000.