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 his weekly 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 beneath the surface. 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, remain deeply negative, indicating that the price increase was driven by spot buying or short covering rather than conviction from leveraged long positions. While institutional flows have been a positive factor, with bitcoin ETFs recording nine consecutive days of inflows and total April inflows reaching $2.5 billion, Thielen warned that the rally's structure remains fragile. The market has shifted to a low-funding, low-volume regime, which 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 also shows a similar picture, with even weaker participation and limited appetite for risk. Despite these signals, the setup is not outright bearish, and the risk of forced liquidations on the downside is reduced due to limited leveraged long positions. 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.