Bitcoin's recent ascent towards $80,000 is exhibiting signs of weakness, with subdued trading activity and muted derivatives market participation raising concerns about the rally's sustainability. In his weekly report, 10x Research head Markus Thielen highlighted a discrepancy between the price movement and the underlying market engagement, 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 sharply, with bitcoin's weekly volume 17% below average and ether's volume down 20%.
Funding rates, a measure of 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 price increase was driven by spot buying or short covering rather than conviction-driven leveraged long positions. Institutional investment has 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.' The options market reinforces this view, with volatility falling into the lower quartile of its historical range and traders expecting relatively modest price swings. Ethereum's market also exhibits weak participation, with volumes plummeting over 50% and derivatives positioning showing limited risk appetite. While the setup is not overtly bearish, the lack of conviction among investors leaves the rally vulnerable to external factors, with macroeconomic developments potentially determining the direction of the market in the coming days.