Bitcoin’s impressive April rally, marked by a 12.7% gain, may be more fragile than it appears, according to CryptoQuant. While both Bitcoin and Ether posted their best monthly performances in years, driven primarily by a surge in perpetual futures trading, underlying demand signals suggest caution. CryptoQuant’s metrics indicate that while futures demand increased, spot demand remained negative, a divergence that historically precedes price corrections.
This reliance on speculative trading rather than solid accumulation raises concerns about the sustainability of recent gains. As highlighted by Julio Moreno, head of research at CryptoQuant, the current market dynamics echo patterns seen before the 2022 bear market, where similar conditions led to significant price declines. With regulatory progress stalled and macroeconomic factors influencing crypto sentiment, the reliance on futures trading could expose the market to further volatility.
For market professionals, the key takeaway is to monitor the balance between futures and spot demand closely. The lack of robust spot accumulation could signal a potential correction, particularly if broader market conditions remain bearish.
Source: cnbc.com