Bitcoin's recent push towards $80,000 is showing signs of weakness, with low trading volumes and subdued derivatives activity raising concerns about the rally's durability. 10x Research head Markus Thielen notes a disconnect between price movements and market participation, citing a 4.7% increase in bitcoin's value over the past week, yet accompanied by cautionary data. Trading volumes have plummeted, 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 stating that the move upwards was driven by spot buying or short covering rather than conviction from leveraged long positions.
Institutional flows have been a positive factor, with bitcoin ETFs recording nine consecutive days of inflows, totaling $2.5 billion in April, and bitcoin dominance rising to 60%. However, Thielen warns 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 modest price swings.
Ethereum's market shows an even weaker participation, with volumes dropping over 50% and derivatives positioning indicating limited risk appetite. While the setup is not outright bearish, with limited leveraged long positions reducing the risk of forced liquidations, the rally's stability depends on broader market conditions providing support.