Bitcoin has recently drawn attention by climbing toward the $80,000 mark, but analysts are raising concerns about the sustainability of this rally due to thin trading activity and weak derivatives interest. Markus Thielen, Head of Research at 10x Research, highlighted the disconnect between price action and overall market participation in his latest weekly report. Thielen noted that Bitcoin rose 4.7% last week, but underlying data paints a more cautious picture.
Weakening trading volumes
Data show that Bitcoin’s weekly trading volume remains 17% below the historical average. Ethereum has seen an even sharper decline, with ETH trading volume falling by 20%. Funding rates, which are often viewed as an indicator of leverage in the market, have also turned decisively negative. According to Thielen, funding rates saw a drop of 6.8%, hitting some of the lowest levels on record. Aggregate trading volume dropped by 33%, pushing it into the bottom quartile. This suggests the recent price rally has been driven mostly by spot buying and short covering, while leveraged positions are increasingly scarce as investors seek lower risk.
This distinction is critical, as spot purchases tend to be more stable and often reflect institutional demand, but they do not always generate the momentum typically seen in bull markets. As a result, the ongoing decline in trading volume fails to provide the kind of market energy that usually fuels a strong uptrend.
Institutional interest and ETF inflows
On the institutional front, sentiment remains generally positive. Bitcoin-focused exchange-traded funds have posted net inflows for nine consecutive days, with a total of $2.5 billion added in April alone. In addition, Bitcoin’s share of overall cryptocurrency market capitalization has risen to 60%, signaling that capital is concentrating in Bitcoin rather than in other digital assets.
Despite this, Thielen considers the market’s current stance to be fragile. His report notes that most participants have shifted to the sidelines, with subdued trading and negative funding rates reflecting more indecision and caution than outright bullishness.
Market expectations and potential catalysts
Derivatives markets back up this cautious outlook. In options trading, volatility has dropped to the lowest quartile of its historical range, and most investors expect stable price action in the coming week. The report also highlights that while market sentiment readings are high, actual activity seems muted.
The situation is even more subdued on the Ethereum side, where trading volume has fallen by more than 50% and appetite for risk in derivatives positions remains weak. Thielen commented that the crash in volumes underscores lingering distrust and extremely limited participation.
Still, there is no strong expectation for a sharp market decline. The absence of heavily leveraged long positions limits the risk of forced liquidations in case of a sudden downturn. Thielen points out that if a near-term catalyst emerges, a sharp upward move could follow, although this would likely depend on macroeconomic events outside the crypto sphere.
“The market has shifted from an active trading phase to one where most participants are waiting on the sidelines; low funding and low volumes usually signal hesitation,” the report emphasized.
In summary, while Bitcoin’s upward momentum remains intact, overall market participation is weak. Experts believe that external macroeconomic events could play a decisive role in shaping the crypto market’s short-term direction.
