Week of 21 May 2018: Bitcoin falls 13.93% and Ether 20.35%, both closing near their weekly lows
When two assets fall together in the same week but on very different volumes, what does that week say about direction, and what can it not say about the selling behind it?
BTC fell from 8,526.97 to 7,338.99 (-13.93%) and ETH from 716.16 to 570.40 (-20.35%). Both closed in the lower third of their weekly ranges, and both sat more than 37% below their 52-week highs. BTC traded at 0.68 times its prior 12-week dollar volume, ETH at 1.13 times.
What the data shows. Both markets set their weekly highs early on Monday 21 May (BTC 8,595.31 at 06:00 UTC, ETH 720.46 at 07:00 UTC) and then declined for most of the week. Wednesday 23 May was the worst day for both (BTC -5.96%, ETH -9.94%) and produced the largest hourly moves: -2.27% for BTC in the hour starting 15:00 UTC and -3.26% for ETH starting 07:00 UTC. Thursday 24 May was the best day for both (BTC +0.97%, ETH +4.33%), a rebound inside the down week. BTC reached its low only at 00:00 UTC on Sunday 27 May (7,231.11); ETH reached its low on Thursday 24 May (550.00). Both closed in the lower third of their ranges, 7.9% up from the low for BTC and 12.0% for ETH, so each week ended nearer its low than its high.
What it does not show. The candles record the path, not the reason or the sellers. Nothing here identifies who was trading or whether positions were forced. Volume tells two different stories without explaining them: BTC turned over 1.47 billion dollars, 0.68 times its prior 12-week average, while ETH's 0.58 billion was 1.13 times its average. Falling price on lighter BTC volume is consistent with several different mechanisms, and this data cannot separate them.
What a careful desk would check. Realised volatility, the size of the swings that actually happened scaled to a yearly figure, was 60.2% for BTC and 97.6% for ETH. The four prior weeks had been mixed (BTC 7.21%, 2.57%, -10.16%, -1.76%), so this week extended a soft stretch rather than reversing a strong one. With only 14 weeks of history in this dataset, no meaningful percentile ranking of this week's return is available, and a desk would not treat the decline as statistically unusual on that basis alone.
Ether against Bitcoin. The two assets moved closely (hourly correlation 0.89), but ETH fell further, so the ETH/BTC ratio dropped 7.46%. ETH also sat 50.79% below its 52-week high against BTC's 37.40%. At the week's close BTC was 37.40% below its 52-week high and ETH 50.79%.
What would change this reading
- If BTC closes a later week back above its open of 8,526.97, this week reads as a leg down within a range rather than a fresh decline.
- If BTC volume returns towards its prior 12-week average while price keeps falling, the light-volume reading of this week weakens.
- If the ETH/BTC ratio fall of 7.46% reverses while both assets rise, the week was broad pressure with ETH overextending, not a lasting divergence.
- If later data places a close below this week's low of 7,231.11 for BTC, the Sunday low was a step down rather than a floor.
Terms
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- hourly correlation
- how closely two prices moved together hour by hour, from -1 to 1
- close location
- where the week's closing price sits within the week's high-to-low range, as a percentage up from the low