Bitcoin's recent push towards $80,000 is showing signs of weakness, with low trading volumes and muted activity in the derivatives market raising concerns about the sustainability of the rally. In a recent report, 10x Research head Markus Thielen highlighted a disconnect between the price movement and the underlying market participation, stating that the 4.7% increase in bitcoin's value over the past week tells a cautious story. Trading volumes have dropped significantly, 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 the move higher was driven by spot buying or short covering rather than conviction from leveraged long positions. This distinction is important, as spot buying tends to be more stable but less explosive than leveraged trades, leaving the market without the momentum typically seen in strong bull runs. Despite institutional flows being a positive factor, with bitcoin ETFs recording nine consecutive days of inflows and total April inflows reaching $2.5 billion, Thielen cautioned that the rally's structure remains fragile. The market has shifted from an actively traded environment to one where participants are largely on the sidelines, with a low-funding, low-volume regime that historically reflects hesitation rather than momentum.
Options markets reinforce this view, with volatility falling into the lower quartile of its historical range and traders pricing in relatively modest price swings over the coming week. 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, with leveraged long positions limited, the risk of forced liquidations on the downside is reduced, and the near-term risk/reward is asymmetric to the upside if a catalyst emerges. This catalyst may come from outside the crypto space, with macroeconomic developments being the key factor that could determine direction in the days ahead.