The U.S. Securities and Exchange Commission approved the first spot Bitcoin ETF on January 10, 2024, prompting around ten global asset management firms to subsequently apply to the SEC to issue Bitcoin ETFs. Cryptocurrency data research firm CryptoQuant indicated that despite Bitcoin's significant price increase in April, the foundation for this rebound is not solid. Bitcoin rose 12.7% for the entire month of April, marking two consecutive months of gains and its best monthly performance since April 2025. Prior to this, Bitcoin had experienced five consecutive months of declines, with March only managing a slight gain of nearly 2%. During the same period, Ethereum increased by 8%, also achieving two months of consecutive gains, representing its strongest monthly performance since August of the previous year. However, CryptoQuant pointed out that perpetual contracts, the primary vehicle for leveraged trading in the crypto market, were the sole driver of this recent price increase. The firm's "true demand" indicator, which tracks the 30-day net change in spot Bitcoin purchases, remained in negative territory throughout April, while only futures trading demand saw a significant surge. CryptoQuant's Head of Research, Julio Moreno, stated that the simultaneous occurrence of these two trends often serves as a warning signal, indicating that the current price increase is driven by speculative sentiment rather than being supported by fundamental, genuine spot buying. "A divergence where futures demand rises while spot demand shrinks suggests that this price rally is fueled by leveraged capital, not by the market consistently accumulating coins," Moreno said in a research report on Thursday. "Historically, such market conditions lack the structural fundamental support needed to sustain price increases, and prices often correct once concentrated futures positions are unwound." The data also highlights a shifting environment in the cryptocurrency market, where the importance of crypto derivatives, including perpetual contracts and the increasingly popular prediction markets, continues to grow. Perpetual contracts have become a core arena for crypto trading activity, liquidity, and price discovery. Meanwhile, the spot trading that early exchanges relied on is now seeing its role in driving industry growth and revenue diminish. Spot market trends depend on sustained long-term accumulation cycles, a trend the crypto market cannot always maintain. Overall demand in the cryptocurrency market in 2026 is fragmented and largely consists of passive, follow-the-trend activity. Bitcoin's price movements are highly correlated with the broader market, driven primarily by changes in U.S. interest rate expectations and sudden geopolitical shocks, such as the Iran conflict, rather than consistent spot accumulation or underlying genuine buying. The industry also lacks new catalysts, as market structure regulatory legislation like the CLARITY Act remains stalled. Moreno cautioned that a similar pattern of rising futures demand alongside weakening spot demand appeared early in the 2022 bear market, which was followed by a prolonged price decline. He noted in the report that if the overall market maintains a bearish bias, the current Bitcoin uptrend faces the risk of a downward correction. Of course, the market in 2022 was also confronting an aggressive Federal Reserve interest rate hiking cycle and systemic contagion events within the crypto industry. Furthermore, institutional adoption of Bitcoin was not yet widespread, spot Bitcoin ETFs had not been launched, and there was no ecosystem of corporate treasury purchases on the scale of a company like MicroStrategy (later renamed Strategy). "The current situation is not one where spot demand is lagging but catching up to the futures-led activity," Moreno said. "Rallies fueled by leverage often have a built-in ceiling. Without follow-through spot buying to support higher price levels, concentrated unwinding of futures positions typically acts as a trigger for a subsequent correction." Bitcoin ETFs saw net inflows totaling $1.9 billion in April, bringing total net assets under management to $100.53 billion. Corporate treasury holders added approximately 58,000 Bitcoin during the month, valued at around $4.4 billion based on end-of-month prices. After reaching a high near $79,500 in April, Bitcoin trended generally lower for the remainder of the month, with its lows gradually descending. On the first trading day of May, Bitcoin rose over 2% on Friday, trading just over 1% below its April peak.
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