Bitcoin closed April with a strong twelve percent gain, marking its biggest monthly increase in a year. Despite this upward move, the price slipped back to around seventy five thousand dollars by the end of the month, raising questions about whether the rally was built on solid fundamentals or short term speculation.
CryptoQuant has since analyzed the situation, offering insight into what fueled the surge and whether similar price action could continue into May.
On Chain Data Suggests Speculative Momentum
According to CryptoQuant’s latest weekly report, Bitcoin’s price rise in April was largely powered by activity in the perpetual futures market. Meanwhile, demand in the spot market continued to decline. This imbalance points to a lack of genuine buying interest, indicating that leveraged trading rather than new accumulation was the main driver behind the rally.
Historically, periods where futures demand rises while spot demand weakens tend to produce short lived price increases, especially during bearish market phases. These conditions often lack the strong foundation needed to sustain long term growth.
Throughout April, Bitcoin’s apparent demand metric, which measures the thirty day change in estimated spot buying activity on chain, stayed in negative territory. In contrast, demand from perpetual futures kept increasing as speculative positions grew.
CryptoQuant noted that when prices climb while spot demand shrinks, it is one of the clearest signs that the move is driven by speculation rather than underlying strength. The consistently negative demand reading during the rally reinforces the absence of solid market support.
Risk of Extended Downtrend Remains
Analysts at CryptoQuant also pointed out that the current demand pattern closely resembles the early stages of the 2022 bear market. At that time, a similar setup was followed by a prolonged decline lasting several months, highlighting potential downside risks for Bitcoin.
While history does not always repeat exactly, such patterns are often seen as early warning signs of market weakness. If Bitcoin’s apparent demand fails to turn positive soon, any attempts to push toward the seventy nine thousand dollar level may struggle to hold.
In addition, CryptoQuant’s Bull Score Index dropped from fifty to forty during April, shifting from a neutral stance into bearish territory. This decline suggests that overall on chain fundamentals weakened even as prices temporarily moved higher, further supporting the idea that the rally lacked strong backing.#crypto#cryptonewshttps://coinsignals.net https://t.me/coinsignalpublic
