Week of 20 August 2018: Bitcoin rises 3.43% while Ether falls 8.36% in the same week
When Bitcoin and Ether move in opposite directions over a single week, what does the split say about relative strength, and what can one week of price data not explain?
BTC rose from 6,477.53 to 6,700.00 (+3.43%) while ETH fell from 299.30 to 274.29 (-8.36%), a gap of 11.79 percentage points. The ETH/BTC ratio dropped 11.4%. Hourly correlation was 0.89, so the two markets tracked each other hour by hour even as their weekly totals split.
What the data shows. BTC set its low of 6,220.00 at 23:00 UTC on Monday 20 August, then its high of 6,882.54 at 02:00 UTC on Wednesday 22 August, a range of 10.65%. The largest hourly move, 5.38%, came in the hour starting 01:00 UTC on Wednesday. BTC's best day was Tuesday 21 August (+3.66%) and its worst was Monday (-3.44%), and it closed at 72.4% of its weekly range, in the upper third. Dollar volume of 1.87 billion was 1.06 times its prior twelve-week average. ETH took the opposite path: its high of 304.04 came at 02:00 UTC on Monday and its low of 259.50 at 22:00 UTC on Wednesday, a range of 17.16%, and it closed at 33.2% of its range, in the lower third. ETH's worst day, Monday, took 9.62% off.
What it does not show. The data records where prices went, not why the two assets separated. Nothing here identifies who was trading or whether the divergence reflects positioning, flows or something else. With only 27 weeks of history, the percentile ranks (63rd for BTC, 30th for ETH) rest on a short sample. No funding figures are available for this week, so the cost of leveraged positions cannot be read.
What a careful desk would check. Realised volatility, the size of the swings that actually happened, scaled to a yearly figure, was 60.1% for BTC and 81.3% for ETH. Both assets saw their largest hourly move in the same hour, early in the UTC day, and both weekly highs also came early in the UTC day, while both lows came late in the UTC day. BTC reached its high after its low; ETH reached its low after its high. A desk would ask whether the split persisted after Sunday's close or reversed within days, since one week cannot establish a trend.
Ether against Bitcoin. The ETH/BTC ratio fell 11.4%, and hourly correlation was 0.89. So the two markets moved together closely hour by hour while ETH fell further than BTC. The data shows the size of the split, not what produced it.
What would change this reading
- If the ETH/BTC ratio keeps falling after this week's 11.4% drop, the divergence reads as the start of a relative trend rather than a one-week gap.
- If BTC trades back below its weekly low of 6,220.00, the +3.43% week reads as a pause inside a decline that had already taken 14.45% and 10.19% off in two of the prior four weeks.
- If hourly correlation falls well below 0.89, the two markets have begun to decouple, which changes how a BTC position hedges ETH exposure.
Terms
- hourly correlation
- how closely two prices moved together hour by hour, from -1 to 1
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- ETH/BTC ratio
- the price of one Ether divided by the price of one Bitcoin; it falls when Ether underperforms Bitcoin