Bitcoin's recent push towards $80,000 is showing signs of weakness, with low trading volumes and muted activity in the derivatives market raising concerns about the rally's sustainability. In a recent report, 10x Research head Markus Thielen highlighted the disconnect between the price movement and the underlying market participation, stating that 'Bitcoin rallied 4.7% over the past week, yet the accompanying data tells a cautious story beneath the surface.' Trading volumes have declined significantly, with bitcoin's weekly volume 17% below average and ether's volume down 20%.
Furthermore, funding rates, which measure leveraged positioning, remain deeply negative, with Thielen noting that 'funding rates fell 6.8% to the 3rd percentile and volumes collapsed 33% to the 4th percentile.' This suggests that the move higher was driven by spot buying or short covering rather than conviction among leveraged long traders. While institutional flows have been positive, with bitcoin ETFs recording nine consecutive days of inflows, the rally's structure remains fragile. Thielen warned that 'the market has shifted from a more actively traded environment to one where participants are largely on the sidelines,' describing a 'low-funding, low-volume regime that historically reflects hesitation rather than momentum.' The options market reinforces this view, with volatility falling into the lower quartile of its historical range and traders pricing in relatively modest price swings over the coming week.
Ethereum's market also shows a similar picture, with volumes dropping over 50% and limited appetite for risk. Despite these signs, the setup is not entirely bearish, as the limited number of leveraged long positions reduces the risk of forced liquidations on the downside.
However, the rally's sustainability depends on stronger participation or supportive broader market conditions.