CoinDesk's weekly ‘Chart of the Week’ highlights topical digital asset developments with vital commentary and analysis.
While Gold hits new all-time highs, Bitcoin’s 30-day rolling correlation has flipped positive last week for the first time this year to 0.40. Despite this shift, BTC remains technically heavy, failing to reclaim its 50-week EMA after a 1% weekly dip.
The core thing to monitoring now is whether a sustained Gold uptrend will provide a medium-term lift for Bitcoin or if BTC’s persistent price weakness confirms a decoupling from traditional safe-haven assets.
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.
Memecoin trading volumes surged in early January jumping from a 12.9% low in December to 41% of altcoin exchange activity. This expansion came largely at the expense of privacy coins, which fell from a 61% peak to 14% over the same period.
The memecoin rally is being led by major tokens like PEPE and MOG, both over 40% YTD. Memecoin activity frequently signals broader market momentum, making this surge an important indicator to watch for a potential market-wide recovery.
Despite the overall downtrend since 11th October (i.e. post the major October drop), altcoins - proxied by the CD5 - have mostly performed in line with or even better than BTC, with the CD20 and CD80 indices actually showing relative outperformance.
This is surprising because altcoins usually exhibit higher beta during a market drop, suggesting that the recent selling pressure may be more BTC-centric, or that altcoin selling has already been significantly exhausted.
In this week's COTW, we examine Ethena's USDe, which has declined from $14 billion to $10 billion in market capitalization over the past 30 days. The contraction follows a compression in USDe's yield, driven by declining BTC and ETH perpetual funding rates.
The blended funding rate recently dipped into negative territory on multiple occasions, since recovering to the 2-4% range. Should this recovery prove sustainable, it could restore USDe's yield proposition and potentially encourage capital to flow back to the stablecoin, reversing the recent downward trend.
In this week's Chart of the Week (COTW), we look at Spot DEX Volumes versus an equally weighted DEX Token Index. As per DeFillama's data, Spot DEX volumes have been climbing for the past few weeks and soared to a new yearly high last week, hitting $178 billion, showing robust on-chain activity. However, the DEX Token Index - comprising key tokens like AERO, UNI, RAY, VELO, and CAKE - has been broadly trending downwards.
This divergence, where volume is peaking but the underlying token valuations are lagging, presents a curious situation: it could be an opportunity if the tokens' fundamentals are set to catch up with trading activity, or it might be a market signal that the tokens' value proposition is not yet reflecting the high volume.
In this week's COTW (Chart of the Week), we look at centralized exchange volumes (spot + futures). Weekly volume was reported at a massive $2.7T - the highest since January 2025. This unprecedented activity is directly in line with the scale of the volatility, most notably the estimated $19B in liquidations that occurred on 10th October.
This outcome clearly demonstrates the highly impactful nature of the recent market crash.
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