Bitcoin's recent push towards $80,000 is showing signs of weakness, with low trading volume and muted derivatives activity raising concerns about the durability of the rally. A report by 10x Research head Markus Thielen highlights a disconnect between the price action and underlying market participation, with bitcoin rallying 4.7% over the past week despite cautious underlying data. Trading volumes have dropped significantly, with bitcoin's weekly volume 17% below average and ether's volume falling 20%. Funding rates, a measure of 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.
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 cautions 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.
Ethereum's market paints a similar picture, with volumes dropping over 50% and derivatives positioning showing limited appetite for risk. 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.
The key factor that could determine direction in the days ahead is macroeconomic developments, and for now, bitcoin's rally appears intact but may struggle to hold unless broader market conditions provide support.