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 weekly report, 10x Research head Markus Thielen highlighted the disparity between the price movement and the underlying market participation, stating that the 4.7% increase in bitcoin's price over the past week tells a cautious story. Trading volumes have declined significantly, with bitcoin's weekly volume 17% below average and ether's volume down 20%.
Funding rates, which measure leveraged positioning, remain deeply negative, with Thielen noting that the move higher was driven by spot buying or short covering rather than leveraged long conviction. This distinction is important, as spot buying tends to be more stable but less explosive than leveraged trades, leaving the market without the momentum typically seen in strong bull runs. Institutional flows have been a positive factor, with bitcoin ETFs recording nine consecutive days of inflows, totaling $2.5 billion in April, and bitcoin's dominance rising to 60%.
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. 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 even weaker participation, and Thielen noted that the volume implosion points to a market where conviction remains low and participants are largely disengaged. Despite these signals, the setup is not outright bearish, with the risk of forced liquidations on the downside reduced due to limited leveraged long positions.
Thielen believes that the near-term risk/reward is asymmetric to the upside if a catalyst emerges, which may come from outside the crypto space, with macroeconomic developments being a key factor in determining the direction in the days ahead.