Bitcoin continues to perform well and capture the market's attention, but this increase is already raising doubts among analysts. In April, the progression of the first crypto was based on unusual dynamics, far from the classic patterns of a solid bullish cycle. On-chain data analyzed by CryptoQuant reveals a worrying imbalance, where speculation takes precedence over real demand. A configuration which, in the past, has often preceded market reversals.
In brief
- Bitcoin records a sharp rise in April, attracting the attention of the market and analysts.
- On-chain data shows that this progression is mainly based on futures contracts.
- Demand on the spot market remains in decline, revealing an imbalance in the structure of the rally.
- CryptoQuant identifies a speculative dynamic already observed during fragile market phases.
A rally fueled by derivatives markets
Bitcoin rose about 20% in April, from $66,000 to nearly $79,000. This rapid increase takes place in a context where on-chain indicators are closely scrutinized to assess the quality of the movement. The data analyzed by CryptoQuant reveals a notable discrepancy between the price evolution and the flows observed in the different market segments.
Analyst Julio Moreno highlights a specific dynamic which has driven this progression. He asserts that “Demand on perpetual futures contracts was the sole driver of bitcoin's rise in April, while apparent demand on the spot market contracted throughout the period”. This observation indicates that the increase is not based on a classic accumulation, but on a very distinct engine, centered on derivatives markets.
- Demand on perpetual futures contracts drove the price;
- Spot demand remained in contraction throughout the period;
- The movement was built without any real accumulation in the spot market.
A market structure that fuels the risk of correction
CryptoQuant warns of the implications of this divergence. The analysis specifies that “Historically, this type of pattern does not have strong enough foundations to support a price rise and usually ends in a correction”. This type of configuration has already been observed during bear market phases, where increases were based on unstable dynamics.
The weight of leveraged positions accentuates the vulnerability of the bitcoin market. In the event of a reversal, these positions can be liquidated quickly, amplifying bearish movements. The absence of spot demand reinforces this exposure, due to a lack of buyers capable of supporting prices in phases of tension.
In this context, the evolution of the price of bitcoin will depend on the market's ability to regain a base of real demand. A resumption of activity in the spot market could support a lasting trend. Conversely, the persistence of an increase driven by derivatives exposes the market to corrections, in an environment where speculation remains the main driver of prices.
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