Despite Bitcoin staging a notable price recovery, surging approximately 30% since February 6th, on-chain analytics firm CryptoQuant has cautioned that the market has not yet entered a new bull cycle. In its latest assessment, the firm highlights a persistent weakness in fundamental demand dynamics.
CryptoQuant's key metric, 'apparent demand' (30-day total), remains in negative territory at roughly -44,700 BTC. While this marks a significant improvement from the -89,000 BTC level observed in early April, it still indicates that the market has not generated a clear surplus of demand. The report notes that apparent demand has generally been negative since the start of the year. A brief positive deviation at the end of February was attributed to a decrease in Bitcoin production caused by adverse weather conditions in the US that slowed mining activity, rather than a genuine increase in demand.
In a separate analysis, Capriole Investments founder Charles Edwards pointed to a potentially bullish signal from Bitcoin Digital Asset Treasuries (DATs). Data shows that the percentage of DAT firms participating in buying saw a sharp decline in April before experiencing a quick bounce, suggesting a possible inflection point. Edwards noted that similar inflections have historically been very bullish for Bitcoin, though he cautioned that the sample size for this trend remains small.
Adding to the cautious outlook, CryptoQuant also highlighted that the recent price recovery has been driven by futures demand rather than spot demand. The firm warned that this same structure—a rally fueled by derivatives while spot demand contracts—was seen in January before the rally fizzled out, and also appeared in the 2022 bear market, preceding the next leg down for BTC. "It doesn't guarantee the same outcome, but structurally, this is a bearish demand signal," the analytics firm stated.
