April ended with bitcoin (BTC) posting a 12% increase – the biggest such gain in a year. Although the asset had corrected slightly to $75,000 by the last day of the month, market participants wondered whether the rally was structural or speculative.
To that end, the market research firm CryptoQuant has offered insights into what drove the rally and the possibility of a similar trend in bitcoin’s price in May.
On-chain Metrics Point to Speculative Action
According to the latest CryptoQuant weekly report, demand from the perpetual futures market drove bitcoin’s price movement in April. At the same time, spot demand remained in contraction. This dynamic indicated the absence of organic buying during the surge, suggesting that leverage, rather than fresh coin accumulation, drove the price increase.
Based on historical data, rising futures demand alongside contracting spot demand is associated with unsustained price gains during bear seasons. These kinds of situations highlight the lack of the structural foundation required to sustain price gains.
Throughout April, Bitcoin’s apparent demand indicator, which tracks the 30-day change in estimated on-chain spot buying activity, remained in negative territory. Conversely, the metric monitoring perpetual futures demand continued to expand as speculative positioning increased.
“The divergence between rising price and contracting spot demand is one of the clearest on-chain signals that price gains are speculative rather than structural. Apparent demand stayed negative across the full April price surge, confirming the absence of fundamental demand support,” CryptoQuant explained.
Is a Multi-Month Price Decline Incoming?
Furthermore, CryptoQuant analysts revealed that the current demand structure is identical to that observed at the start of the 2022 bear market. At the time, the dynamic preceded a sustained multi-month price decline, bringing significant downside risk to BTC. It is worth noting that the similarity between past and present demand structures does not guarantee identical outcomes. However, such a dynamic is usually a bearish precedent and a reliable early indicator of price fragility.
If Bitcoin’s apparent demand does not reverse from negative to positive in the near term, price rallies toward the $79,000 region will lack the support needed for a sustained breakout.
Meanwhile, CryptoQuant’s Bull Score Index fell from 50 to 40 in April, signaling a return from neutral to bearish territory. Such a move shows that on-chain fundamentals deteriorated after the price action driven by speculative futures demand.
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