Week of 23 July 2018: Bitcoin gains 11.04% while Ether rises only 1.95%, an 8.18% ratio gap
When both assets rise in the same week but one gains nearly six times more, what does the price data say about where the buying went, and what does it leave open?
BTC rose from 7,394.78 to 8,211.00 (+11.04%) and ETH from 457.47 to 466.40 (+1.95%). BTC dollar volume ran 1.45 times its prior 12-week average; ETH volume matched its average. The ETH/BTC ratio fell 8.18%, so ETH lost ground against BTC even as both rose.
What the data shows. BTC set its low of 7,375.00 at the week's open hour on Monday 23 July, then its high of 8,491.77 in the early UTC hours of Wednesday 25 July. Most of the week's gain arrived on Tuesday 24 July, when BTC added 8.75% and ETH 6.49%. Thursday 26 July was the worst day for both (-3.13% and -2.01%). BTC closed at 8,211.00, in the upper third of its weekly range, still 29.96% below its 52-week high. ETH closed at 466.40, mid-range and 59.76% below its 52-week high. The prior four weeks were positive for BTC three times (3.57%, 5.52%, -5.35%, 16.38%).
What it does not show. The candles do not say who was buying or why Bitcoin drew the flows that Ether did not. Hourly correlation was 0.77, close but not identical, so the two markets moved together loosely rather than in lockstep. With no funding data in this week's record, the cost of leveraged positions cannot be read here. Twenty-three weeks of history is a short base, so no percentile of this return against a longer record is available.
What a careful desk would check. BTC realised volatility, a yearly scaling of the price swings that actually happened, was 58.0% for BTC and 52.9% for ETH. The largest hourly move was 4.07% in the hour starting 15:00 UTC on Friday 27 July, two days after the weekly high; the record gives its size and its timing in the middle of the UTC day, but not its direction. A desk would ask whether its sizing and stop distances assume the two assets still hedge each other; a 0.77 correlation with an 8.18% ratio gap says they moved less together this week than a 1-to-1 hedge would require.
Ether against Bitcoin. The ETH/BTC ratio fell 8.18% while both assets rose, so ETH gave back ground in a rising tape. ETH dollar volume was 0.52 billion, 0.97 times its prior 12-week average, against BTC's 2.33 billion at 1.45 times. The divergence therefore came with a volume split as well as a price split.
What would change this reading
- If BTC holds above its weekly open of 7,394.78 in later weeks, this week's gain reads as sustained rather than a single-day squeeze.
- If the ETH/BTC ratio recovers part of the 8.18% drop, the lag was temporary.
- If ETH volume rises above its 0.97-times level while BTC volume fades, the two markets may re-synchronise.
- If either asset trades below its weekly low (BTC 7,375.00, ETH 447.11), the week reads as a failed advance.
Terms
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- ETH/BTC ratio change
- how Ether performed against Bitcoin directly, independent of the dollar price of either
- close location
- where the week's closing price sat within the week's full high-to-low range