Bitcoin showed a momentary flare of resilience on Wednesday, reaching up to $70,000 before retreating to approximately $68,300 by Thursday morning. This volatility represents a near 5% swing from its high to an overnight low of $67,700, marking it as the most significant effort to reclaim the $70,000 threshold since the market’s crash on February 5.
While Bitcoin’s recovery faced headwinds, altcoins flourished. Cardano stood at the forefront with an impressive gain of 10.8%, followed closely by Ether, which rose by 8.5%, and Dogecoin, up 8.3%. Bitcoin, by comparison, recorded a modest increase of just 4.3%, one of the smallest upticks among major cryptocurrencies. Such a divergence in performance typically signifies a renewed risk appetite among traders, who are likely shifting their focus toward higher-beta altcoins after periods of bearish sentiment.
Daniel Reis-Faria, CEO of ZeroStack, observed, “The wave of forced selling is starting to clear out. Altcoins are outperforming again, and more of them are ahead of Bitcoin. That tells me we’re seeing a rotation.” This sentiment reflects a broader trend as traders gradually regain confidence in the sector.
Nvidia’s Earnings: A Short-Lived Boost
On the equities front, Nvidia reported fourth-quarter earnings that exceeded Wall Street’s forecasts in both profit and revenue. While these results initially alleviated concerns surrounding the so-called “AI scare trade” impacting financial markets, the stock failed to maintain its upward momentum during extended trading, settling with only a marginal gain of 0.2%. Concurrently, Nasdaq 100 futures slipped by 0.3% following this report.
The S&P 500 managed to notch a second consecutive gain during regular trading on Wednesday, alongside positive performances from the Nasdaq Composite and Dow Jones Industrial Average. However, the excitement around Nvidia was tempered by Salesforce’s approximately 5% dip in after-hours trading, adding to a sliding trend that has seen its stock plummet around 28% year-to-date.
President Trump, in his recent State of the Union address, suggested that Big Tech companies should brace for escalating electricity costs stemming from data centers, highlighting persistent concerns in the technology sector.
Macro Conditions Continue to Weigh on Crypto
Outside the immediate swing of Bitcoin and altcoins, market maker Wintermute pointed out that cryptocurrencies have been losing ground alongside tech stocks as investor capital shifts towards more defensive, tangible assets. This movement has been compounded by stagnation in stablecoin supply, according to crypto finance platform Matrixport, which has posed a challenge for Bitcoin’s recovery efforts.
Data from on-chain analytics firm Glassnode indicates that broader liquidity in the cryptocurrency market could take up to six months or longer to stabilize. Additionally, Cryptoquant’s findings reveal a slowdown in selling activity on exchanges like Binance, suggesting a potential for a short-term recovery. Nevertheless, crypto exchange Bitrue warned that if Bitcoin slips below the critical $60,000 mark, it could trigger cascading liquidations, pushing prices as low as $50,000 to $55,000, or even down to $47,000.
As investors await the release of weekly jobless claims on Thursday and January’s producer price index on Friday, earnings reports are also on the horizon from firms like Dell Technologies and Warner Bros. Discovery, further influencing market sentiment.
