Jan. 30, 2025

CoinDesk 20 Index: 3,828.20  +2.85%
Bitcoin (BTC): $105,080.31  +2.86%
Ether (ETH): $3,212.73  +2.97%
S&P 500: 6,039.31  -0.47%
Gold: $2,777.93  +0.9%
Nikkei 225: 39,513.97  +0.25%

Crypto markets appear to have shrugged off the hawkish policy statementaccompanying the Fed's decision to leave interest rates unchanged on Wednesday.Despite dipping below $102,000, BTC recovered fairly quickly and was trading just below $105,400 at the time of writing, more than 2.6% higher in the last 24 hours. This movement is largely matched by the broader digital asset market, which has climbed 2.4%, as measured by the CoinDesk 20 Index. On-chain activity tracked by Glassnode shows a lower level of retail participation in BTC than in November. That's encouraging for bulls looking for cues on whether the latest move above $100,000 is sustainable. 

Ether has fallen out of favor relative to bitcoin,returning the worst bull-cycle performance against its larger rival since the Ethereum blockchain's inception in 2015. A comparison of the ether to bitcoin ratio across past cycles from the tokens' respective lows shows consistent underperformance. The ratio dropped below 0.0300 to touch 0.02993, a four-year low, on Wednesday. The previous low was recorded on Jan. 19, a day before President Trump's inauguration. This month, the ratio — the exchange rate between the two largest cryptocurrencies — is down 15%. It has declined 44% over the past year. "Ether tends to suffer from 'middle child syndrome,' it is not as scalable as smart contract competitors like solana while it is not really competing with bitcoin as the prime store-of-value," said Andre Dragosch, head of research at Bitwise's European desk. 

Bitcoin miner Core Scientific is the "leader of the pack" of the AI-focused miners, broker Bernstein said in a report. CORZ fell over 30% earlier this week as Chinese AI startup DeepSeek challenged the idea that BTC miners had value as data center plays. The slide means the stock is now available at a deep discount, Bernstein said. "Bitcoin miners have a 12-18 month finite window to build a hybrid data center business, while the hyperscaler capex remains consistent," analysts led by Gautam Chhugani wrote. The stock now trades closer to bitcoin mining valuations rather than data center valuations, "despite 70% of its capacity allocated to AI." Bernstein has an outperform rating on Core Scientific's shares with a $17 price target.

If someone told you that stock market investors are offloading their cherished holdings, you would most likely interpret it as a sign of an impending market downturn.

The narrative, however, differs in the crypto market, where such selling indicates bullishness, according to analysts observing historical trends in the supply held by long-term investors, those wallets holding coins for at least 155 days or over five months.

"Based on our analysis, sharp declines in long-term holder supply have frequently coincided with strong bitcoin rallies, as seen in Q1 and Q4 of 2024," Markus Thielen, founder of 10x Research, said. "As long as long-term holders continue reducing their balances, bitcoin remains at risk of a short squeeze to the upside." 

The total supply held by these wallets has dropped to roughly 13 million BTC. Over 1 million BTC have changed hands during the recent price rise above $100,000 as short-term traders snapped up the long-term holder distribution, according to analytics firm Glassnode.

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- Omkar Godbole