Bitcoin's recent push towards $80,000 is showing signs of weakness, with low trading volumes and sluggish derivatives activity raising concerns about the rally's sustainability. In his weekly report, 10x Research head Markus Thielen highlighted the disconnect between the price movement and the underlying market participation, stating 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 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 move higher was driven by spot buying or short covering rather than leveraged long conviction, which is a less explosive but steadier form of demand.
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 increasing 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 markets 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 is also characterized by weak participation, with volumes dropping over 50% and derivatives positioning showing limited appetite for risk.
Despite these signals, the setup is not outright bearish, and the risk of forced liquidations on the downside is reduced. Thielen noted that '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 market's direction in the coming days.