Bitcoin's recent push towards $80,000 is showing signs of weakness, with low trading volumes and lackluster derivatives activity raising concerns about the rally's sustainability. In a recent report, 10x Research head Markus Thielen highlighted the disconnect between the price movement and the underlying market participation. 'Despite bitcoin's 4.7% increase over the past week, the accompanying data tells a more cautious story,' he noted. Trading volumes have decreased significantly, 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 suggests that the move upward 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, resulting in $2.5 billion in total April inflows. 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 pricing in relatively modest price swings.
Ethereum's market also shows a similar picture, with volumes dropping over 50% and derivatives positioning indicating limited appetite for risk. While the setup is not outright bearish, the lack of conviction and participation from investors leaves the rally vulnerable to external factors, such as macroeconomic developments, which could determine the direction of the market in the coming days.