Week of 1 October 2018: Bitcoin and Ether close flat to lower on half the usual volume
When both assets barely move on volume far below their recent norm, what does the week say about the market's direction, and what does it leave open?
BTC fell 0.17% (6,626.57 to 6,615.26) and ETH 2.96% (233.04 to 226.14), both inside narrow ranges. Dollar volume was 0.49 times BTC's and 0.52 times ETH's prior twelve-week average. Hourly correlation was 0.86, and the ETH/BTC ratio fell 2.79%.
What the data shows. BTC opened at 6,626.57 and closed at 6,615.26, a fall of 0.17% inside a 4.15% range: the high of 6,697.00 came at 22:00 UTC on Friday 5 October, the low of 6,430.00 at 03:00 UTC on Wednesday 3 October. ETH fell 2.96%, from 233.04 to 226.14, inside an 8.95% range, with its low of 216.51 in the same Wednesday hour and its high of 235.88 early on Monday 1 October. The two moved closely hour by hour (correlation 0.86), but ETH fell further, so the ETH/BTC ratio dropped 2.79%. Trading was thin: BTC dollar volume of 0.93 billion was 0.49 times its prior twelve-week average, ETH's 0.33 billion was 0.52 times. Realised volatility — the size of the hourly swings that actually happened, scaled to a yearly figure — was 22.3% for BTC and 43.8% for ETH. The largest hourly moves were small: 1.05% and 2.02%, both in the hour starting 01:00 UTC on Thursday 4 October.
What it does not show. Volume at half the recent norm can mean either disinterest or tightly balanced two-sided trading; price alone cannot separate the two. The data does not identify who was trading or why the low landed on Wednesday. The sequence differs — BTC's high followed its low, ETH's preceded it — which describes the paths but not their causes.
What a careful desk would check. BTC closed at 69.4% of its weekly range, in the upper third, while ETH closed at 49.7%, in the middle third. After a prior four-week sequence for BTC of -14.40%, +4.04%, +3.20% and -1.20%, this week's -0.17% ranked at the 45th percentile of the 33 recorded weeks: an ordinary week by that short history. BTC was 43.57% below its 52-week high and ETH 80.49% below. Thin volume makes these closes weaker evidence, since less flow was needed to produce them.
Ether against Bitcoin. ETH's larger fall and the ratio's 2.79% decline show mild ETH underperformance rather than a split market: correlation was close, and both fell on the same worst day, Tuesday 2 October (-1.27% for BTC, -2.56% for ETH). ETH's realised volatility ran at about twice BTC's, consistent with the size of that gap.
What would change this reading
- If volume returns towards the prior twelve-week norm while price holds above BTC's close of 6,615.26, this week reads as quiet consolidation rather than distribution.
- If the ETH/BTC ratio falls by more than 2.79% again in later weeks, ETH's underperformance becomes a trend worth sizing around.
- If a later week trades below ETH's low of 216.51 or BTC's low of 6,430.00, the Wednesday low was a pause, not a floor.
Terms
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- percentile
- the share of past weeks with a lower value; the 45th percentile means 45% of the 33 recorded weeks were lower
- hourly correlation
- how closely two prices moved together hour by hour, from -1 to 1