Bitcoin could be setting up for a multimonth price decline, after a rally in April driven mainly by futures traders while spot demand declined, according to the crypto analytics firm CryptoQuant.

Bitcoin gained around 20% in April, rising from $66,000 to a peak of $79,000 in a rally “driven entirely by growth in perpetual futures demand,” CryptoQuant said in a report on Thursday. 

Meanwhile, spot demand for Bitcoin contracted throughout the rally, “indicating that the market’s marginal buyer was speculative, not fundamental,” it said.

“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 added.

Bitcoin is trading around $77,000 at the time of writing, rising 2.1% over the past 24 hours. CryptoQuant said Bitcoin's correction from $79,000 last month is consistent with rallies led only by strong futures demand.

Current demand for Bitcoin mirrors a pattern at the start of the 2022 bear market, when futures demand surged while spot demand dropped, a setup that "ultimately preceded a sustained price decline."

“History suggests this setup carries meaningful downside risk as Bitcoin remains in a bear market regime,” CryptoQuant said.

The report is in contrast with a note on Tuesday from Bitwise chief investment officer Matt Hougan, which said the Bitcoin treasury company Strategy has been the “single biggest factor” in Bitcoin's recent rally.

“There have been multiple drivers of the recent rally, including strong buying from ETFs [exchange-traded funds], $3.8 billion since March 1, and renewed purchases by long-term holders. But Strategy has been the single biggest factor,” Hougan argued.

CryptoQuant added that its Bull Score Index, which analyzes market and network activity to gauge market sentiment on a scale of 100, fell from 50 to 40 in April despite the price increase.

“The Bull Score returning back to 40 indicates conditions are ‘getting bearish’ and places the market in the same range that historically preceded continued price weakness,” CryptoQuant said.