Key Takeaways
CryptoQuant says Bitcoin's approximately 20% April rally from $66,000 to $79,000 was "driven entirely by growth in perpetual futures demand" while spot demand contracted -- a historically bearish divergenceThe firm compares current conditions to the start of the 2022 bear market, when a similar futures-spot divergence "ultimately preceded a sustained price decline"CryptoQuant's Bull Score Index fell from 50 to 40 in April despite the price increase, entering a range that "historically preceded continued price weakness"Bitwise CIO Matt Hougan counters that Strategy's $3.8 billion in purchases since March 1 was the "single biggest factor" in the rally, alongside strong ETF buying and long-term holder accumulationBitcoin is currently trading around $77,000, up 2.1% over 24 hours
Bitcoin may be setting up for a multimonth price decline after April's rally was powered by speculative futures demand rather than fundamental spot buying -- a divergence that CryptoQuant warns has historically preceded extended bear market conditions.
In a Thursday research report, CryptoQuant said Bitcoin's approximately 20% gain in April, which took the price from $66,000 to a peak of $79,000, was "driven entirely by growth in perpetual futures demand" while spot demand contracted throughout the same period. The firm described the setup as one of the clearest on-chain warning signals available.
"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," CryptoQuant said, adding that Bitcoin's subsequent correction from the $79,000 peak is "consistent with rallies led only by strong futures demand."
2022 Bear Market Parallel
CryptoQuant identified a direct historical parallel in the setup that preceded the 2022 crypto bear market, when futures demand surged while spot demand declined -- a combination that ultimately gave way to a prolonged and severe price decline. The firm said current demand dynamics mirror that pattern closely enough to warrant caution.
"History suggests this setup carries meaningful downside risk as Bitcoin remains in a bear market regime," CryptoQuant said.
Adding to the concern, the firm's Bull Score Index -- which analyzes market and network activity on a scale of 100 to gauge overall market sentiment -- fell from 50 to 40 during April despite the price increase. A reading of 40 places the market in territory that "historically preceded continued price weakness," CryptoQuant said, marking a deterioration from the neutral reading that had briefly offered bulls a constructive signal earlier in the month.
Bitwise Pushes Back: Strategy Was the Real Driver
The CryptoQuant assessment stands in contrast to a note published Tuesday by Bitwise Chief Investment Officer Matt Hougan, who argued that Michael Saylor's Strategy -- rather than speculative futures activity -- was the dominant force behind April's Bitcoin rally.
"There have been multiple drivers of the recent rally, including strong buying from ETFs at $3.8 billion since March 1, and renewed purchases by long-term holders. But Strategy has been the single biggest factor," Hougan said, pointing to the company's approximately $3.9 billion in Bitcoin purchases during April alone as the primary structural demand driver.
The disagreement between the two firms reflects a genuine analytical debate about the nature of April's rally -- one that has direct implications for whether the current pullback from $79,000 is a temporary consolidation or the beginning of a more sustained decline. If CryptoQuant's futures-driven characterization is correct, the lack of spot demand foundation leaves Bitcoin vulnerable once speculative positioning unwinds. If Hougan's institutional demand thesis is right, the structural bid from corporate treasuries and ETF flows provides a more durable floor.
Bitcoin is currently trading around $77,000, up 2.1% over the past 24 hours, as markets digest the competing narratives heading into May.
Kikyo
Brian
Alex