Week of 7 May 2018: the first weekly fall after four rising weeks for Bitcoin and Ether
After four consecutive rising weeks in both Bitcoin and Ether, what does the first weekly fall show about the shape of a pullback, and what in this data would suggest whether the pullback has run its course?
BTC fell from 9,661.02 to 8,679.71 (-10.16%) and ETH from 794.3 to 729.08 (-8.21%), the first down week after four straight gains for both. Each asset set its weekly high in the week's first hour and its low at 06:00 UTC on Saturday 12 May. ETH outperformed BTC by 1.95 percentage points.
What the data shows. Both assets set their weekly high at 00:00 UTC on Monday 7 May, the week's first hour, though the open itself sat slightly below that high (0.3% for BTC, 0.61% for ETH), and both bottomed at 06:00 UTC on Saturday 12 May. The high therefore came before the low. BTC fell 10.16% and ETH 8.21%. The four prior weeks had all been positive: BTC +19.17%, +5.17%, +7.21% and +2.57%, and ETH +33.34%, +16.3%, +11.31% and +14.97%. The worst day was Friday 11 May (BTC -6.69%, ETH -6.31%); the best was Sunday 13 May (BTC +2.41%, ETH +6.5%). The weekly range, the distance from low to high as a share of the low, was 18.85% for BTC and 26.21% for ETH. Both closed in the middle third of that range (BTC 34.3%, ETH 57.8%), so neither ended near its extreme.
What it does not show. Candles record where price went, not why, and nothing here identifies who traded or whether the selling was forced. Volume split between the assets: BTC dollar volume was 2.0bn, 0.82 times its prior twelve-week average, while ETH reached 0.83bn, 1.57 times its own. The two readings cannot be compared as a single flow. Only 12 weeks of history exist here, so no return percentile is available.
What a careful desk would check. Realised volatility, the swings that actually happened scaled to a yearly figure, was 69.0% for BTC and 117.4% for ETH. The largest one-hour moves differed in timing: BTC +3.3% at 09:00 UTC on Saturday 12 May, ETH -4.88% at 09:00 UTC on Monday 7 May. A desk would ask whether its risk limits fit the ETH figure rather than the BTC one.
Ether against Bitcoin. The two moved closely (hourly correlation 0.86, labelled close), yet the ETH/BTC ratio, Ether's price in Bitcoin, rose 2.17%. ETH lost less ground and finished 1.95 percentage points above BTC for the week. Measured against its own 52-week high, ETH closed 37.1% below it, while BTC closed 25.97% below its own.
What would change this reading
- If a later week trades below this week's low of 8,153.0 for BTC or 633.2 for ETH, the pullback extends rather than settles.
- If a later week closes above this week's open of 9,661.02 for BTC or 794.3 for ETH, the fall reads as a pause in the prior four-week rise.
- If BTC volume stays below its prior twelve-week average while ETH stays above 1.57 times its own, the divergence between the two assets deserves separate reading.
- If the ETH/BTC ratio stops rising while both assets fall together, Ether's relative strength this week does not carry forward.
Terms
- realised volatility
- how much the price actually swung over the week, expressed as a yearly percentage
- ETH/BTC ratio
- Ether's price measured in Bitcoin; it rises when Ether loses less than Bitcoin or gains more
- weekly range
- the distance between the week's high and low, as a percentage of the low