Bitcoin Risks Decline After Futures-Driven April Rally: CryptoQuant

Crypto analytics firm CryptoQuant suggests Bitcoin could be headed for a prolonged price decline. Their analysis indicates that Bitcoin's approximately 20% rally in April, which saw prices climb from $66,000 to a peak of $79,000, was primarily fueled by increased demand in perpetual futures markets. This occurred while spot demand for Bitcoin contracted, signaling that the recent price gains were driven by speculative trading rather than fundamental market strength. CryptoQuant highlights this divergence between rising prices and shrinking spot demand as a key on-chain indicator of speculative price movements. The firm notes that Bitcoin's current correction from its peak is consistent with past rallies driven solely by futures demand, and that the current market conditions mirror the setup at the beginning of the 2022 bear market, which preceded a sustained price drop. This outlook contrasts with some analyses, such as one from Bitwise CIO Matt Hougan, who attributed the rally to factors like ETF buying and long-term holder purchases. CryptoQuant's Bull Score Index also fell in April despite the price increase, indicating a shift towards bearish conditions that have historically preceded price weakness.

(Source：Cointelegraph)