Bitcoin's recent push towards $80,000 is showing signs of weakness, with low trading volumes and subdued derivatives activity raising concerns about the sustainability of the rally. In a recent report, 10x Research head Markus Thielen highlighted a disconnect between the price movement and underlying market participation, noting that 'bitcoin rallied 4.7% over the past week, yet the accompanying data tells a cautious story beneath the surface'. Trading volumes have plummeted, with bitcoin's weekly volume coming in 17% below average and ether's volume falling 20%.
Funding rates, a measure of leveraged positioning, remain deeply negative, with Thielen stating 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 leveraged long conviction, which tends to be less explosive. Institutional flows have been a positive factor, with bitcoin ETFs recording nine consecutive days of inflows and total April inflows reaching $2.5 billion.
However, Thielen warned that the rally's structure remains fragile, with the market shifting to a 'low-funding, low-volume regime that historically reflects hesitation rather than momentum'. Options markets also reinforce 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 more than 50% and derivatives positioning indicating limited appetite for risk.
Despite these signals, the setup is not outright bearish, and the risk of forced liquidations on the downside is reduced. The key factor that could determine direction in the days ahead is macroeconomic developments, and for now, bitcoin's rally appears intact, but it may struggle to hold unless broader market conditions provide support.