Trading activity and implied volatility drop sharply, raising doubts about the sustainability of Bitcoin’s rebound above $64,000.
Bitcoin (BTC) climbed back above $64,000, but the rally unfolded amid thin trading volumes and declining market activity. Analysts noted that crypto trading has fallen sharply from peaks seen earlier this year, with implied volatility dropping to levels typically observed during summer lulls.
The narrow trading range and weak ETF inflows suggest waning conviction among traders. Stablecoin off-ramping and net selling by MicroStrategy (MSTR) over the past month further weighed on sentiment. Funding rates on major exchanges turned negative, indicating a rise in short positions before the recent bounce.
The rebound appears driven by a short squeeze rather than strong spot demand, leaving the rally vulnerable to reversals. Support at $62,700 held before the move higher, but liquidity remains a concern.