CCData's weekly ‘Chart of the Week’ highlights topical digital asset developments with vital commentary and analysis.
In this week's COTW, we examine the 30-day rolling correlation between the S&P 500 (SPX) and Bitcoin (BTC). Recent price movements have seen Bitcoin more closely tracking U.S. TradFi indices, driven by positive economic data hinting at a potential slowdown in rate cuts this year.
The SPX-BTC 30-day correlation has risen to 0.57 from 0.27 on December 23, highlighting the macroeconomic environment's impact on risk-on assets like equities and Bitcoin. This marks the highest point since November's quarterly peak of 0.63, which followed the U.S. presidential elections.
This week’s Chart of the Week highlights May’s correlation of daily returns between BTC, ETH and the SP500, falling to 15.8% and 18.2%, respectively, the lowest level since August 2022.
Digital assets have benefitted from a significant price appreciation following signs that tight monetary policy and high interest rates may soon reach their peak. This comes after the recent collapse of Silicon Valley Bank, causing a stir in the banking system, and amplifying the interest in digital assets.
The depegging of USDC and regulatory issues with BUSD has led to Binance converting $1 billion of their Industry Recovery Initiative funds to BTC, ETH, and BNB, triggering further buy pressure for digital assets.
In this week's COTW, we examine trading activity on centralised exchanges, which ended 2024 on a high note, with both spot and derivatives trading volumes reaching new all-time highs in December at $3.72tn and $7.39tn, respectively. This marked the third consecutive monthly increase, driven by multiple positive catalysts, including the US presidential election.
2024 recorded the highest yearly trading volume on centralised exchanges, surpassing the previous record set in 2021, with an aggregate volume of $75.8tn. Derivatives markets continued to dominate trading activity, holding a market share of 69.2% for the year.
In this week's COTW, we examine Bitcoin's yearly returns from 2011 to 2024, highlighting its extreme volatility and rapid adoption. To date, BTC has achieved a compound annual growth rate (CAGR) of approximately 165% since 2011, underscoring its resilience as one of the best-performing assets during this period.2013 remains Bitcoin's standout year, with a staggering 5,960% return, as its price soared from roughly $13 to $806. Similarly, 2011 (+1,474%) and 2017 (+1,291%) also posted annual returns exceeding 10x.
Only three years—2014 (-61%), 2018 (-72%), and 2022 (-65%)—recorded negative yearly returns, each spaced four years apart, with all declines exceeding 60%.If the historical 4-year cycle pattern persists, where three consecutive positive years are followed by one year of decline, 2025 is expected to end on a positive note. While Bitcoin reaching an all-time high before the next halving could influence the historical applicability of these trends, with numerous catalysts anticipated in 2025, another positive year is likely.
In this week's COTW, we analyse Bitcoin's weekly returns since the November U.S. election results. On December 23rd, Bitcoin recorded its first significant weekly drop following the U.S. elections, declining 10.7% to $94,771. This marked the steepest weekly decline since August when Bitcoin fell 19.1% amid concerns over the unwinding of the Japanese Yen carry trade in U.S. markets
Before this week’s downturn, Bitcoin had enjoyed six consecutive weeks of strong price performance, coinciding with Donald Trump's victory in the U.S. elections on November 5th. This streak of gains was the longest since November 2023, when Bitcoin achieved eight consecutive weeks of upward momentum.
This week's COTW explores Hyperliquid's month-to-date trading volumes alongside the top four centralised exchanges by derivatives volume.
Hyperliquid, the leading decentralised exchange for derivatives, has already achieved an impressive $78.4 billion in trading volume this December, surpassing its previous all-time high recorded in November.
This surge in activity followed the successful launch of its native token on November 29th, which attracted capital inflows and heightened attention to its platform and offerings.
While centralised exchanges like Binance, OKX, and Bybit maintain significantly higher volumes, Hyperliquid's daily trading volume peaked at $10 billion on December 4th, making it the fifth-largest retail derivatives platform on that day.
In this week’s Chart of the Week (COTW), we examine Bitcoin’s historical monthly returns for December since 2010. December has generally been a strong month for Bitcoin, delivering an average return of 11.8%. Since 2014, it ranks as the fifth-best performing month for the asset, with October leading the pack at an average return of 18.2%.
The price action could further be fuelled by the “Santa Rally”, a seasonal trend typically observed in the stock market where equities experience positive price action during late December. However, with the increased institutional participation this cycle, we could see more volatility as we head to the holiday season.
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