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. Markus Thielen, head of 10x Research, notes that despite a 4.7% increase in bitcoin's price over the past week, the underlying market data tells a more cautious story.
Trading volumes have dropped significantly, with bitcoin's weekly volume 17% below average and ether's volume down 20%. Funding rates, which measure leveraged positioning, have also fallen to the 3rd percentile. Thielen attributes the price increase to spot buying or short covering rather than leveraged long conviction, which is a less explosive but more stable form of demand.
Institutional flows have been a positive factor, with bitcoin ETFs recording nine consecutive days of inflows and total April inflows reaching $2.5 billion. However, Thielen warns 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 also reinforces 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 is also characterized by weak participation, with volumes dropping over 50% and derivatives positioning showing 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 a catalyst from outside the crypto space, such as macroeconomic developments, may be needed to determine the direction of the market in the days ahead.