Bitcoin's recent push towards $80,000 is showing signs of weakness, with low trading volume and muted activity in the derivatives market 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 decreased significantly, with bitcoin's weekly volume 17% below average and ether's volume down 20%.
Furthermore, funding rates, which measure leveraged positioning, remain deeply negative, indicating that the move higher was driven by spot buying or short covering rather than leveraged long conviction. While institutional flows have been a positive factor, with bitcoin ETFs recording nine consecutive days of inflows, the rally's structure remains fragile.
Thielen cautioned that 'the market has shifted from a more actively traded environment to one where participants are largely on the sidelines,' describing a 'low-funding, low-volume regime that historically reflects hesitation rather than momentum.' The options markets also 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 more than 50% and derivatives positioning indicating limited appetite for risk. Despite these signals, the setup is not entirely bearish, as the limited number of leveraged long positions reduces the risk of forced liquidations on the downside. However, the rally may struggle to hold unless broader market conditions provide support, with macroeconomic developments being a key factor that could determine direction in the days ahead.