Bitcoin's recent push towards $80,000 is showing signs of weakness, with low trading volumes and muted activity in derivatives markets raising concerns about the rally's sustainability. In his weekly report, 10x Research head Markus Thielen highlighted a disconnect between the price movement and market participation. "Despite a 4.7% increase in bitcoin's price over the past week, the underlying data tells a more cautious story," he noted.
Trading volumes have plummeted, 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 stating that "funding rates fell 6.8% to the 3rd percentile and volumes collapsed 33% to the 4th percentile." This indicates that the price increase was driven by spot buying or short covering rather than confidence in 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 fluctuations over the coming week.
Ethereum's market also shows weak participation, with volumes dropping over 50% and limited appetite for risk. While the setup is not outright bearish, the risk of forced liquidations on the downside is 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.
Macro-economic developments are expected to play a key role in determining the direction of the market in the days ahead.