Bitcoin's recent push towards $80,000 is showing signs of weakness, with low trading activity and muted derivatives market activity 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, noting that 'Bitcoin rallied 4.7% over the past week, yet the accompanying data tells a cautious story beneath the surface.' Trading volumes have declined sharply, 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 stating that 'funding rates fell 6.8% to the 3rd percentile and volumes collapsed 33% to the 4th percentile.' This suggests that the move higher was driven by spot buying or short covering rather than conviction from leveraged long positions.
Institutional demand has been a positive factor, with bitcoin ETFs recording nine consecutive days of inflows and total April inflows reaching $2.5 billion. 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 over the coming week.
Ethereum's market is showing similar signs of weakness, with volumes down over 50% and derivatives positioning indicating limited appetite for risk. Despite these signals, the setup is not outright bearish, with the risk of forced liquidations on the downside reduced due to limited leveraged long positions. The report suggests that macroeconomic developments will be the key factor determining direction in the days ahead, and that a catalyst from outside the crypto space could emerge to support the rally.