Week of 10 December 2018: a further 9% fall on below-average volume, 72% below the high
When prices keep falling but trading activity dries up, what does a quiet weekly decline tell us about whether the selling has run its course, and what can it not tell us?
BTC fell from 3,548.49 to 3,228.67 (-9.01%) and ETH from 93.26 to 84.67 (-9.21%). Both set their highs on Monday 10 December and their lows on Saturday 15 December. Volume was below the prior 12-week average for both (0.67x for BTC, 0.46x for ETH), and the weekly return ranked at the 28th percentile of the 43 weeks recorded.
What the data shows. Both assets opened near the week's top: the BTC high of 3,610 came at 01:00 UTC on Monday 10 December, 1.73% above the open, and the ETH high of 95.21 came in that same hour. Both lows arrived at 15:00 UTC on Saturday 15 December, 3,156.26 for BTC and 81.79 for ETH, so the high came before the low. The full range was 14.38% for BTC and 16.41% for ETH, and both closed in the lower third of that range. The largest single hourly move for BTC was -1.67%, in the hour starting 20:00 UTC on Thursday 13 December, and for ETH -3.0%, in the hour starting 19:00 UTC the same day. Realised volatility, the swings that actually happened scaled to a yearly figure, was 49.9% for BTC and 70.2% for ETH.
What it does not show. Volume below the prior 12-week average records fewer dollars traded, not who traded them or why. Nothing here identifies the seller, and nothing says whether the Saturday low marked an end to the decline. The best day of the week, 12 December, brought BTC only 1.95% and ETH 1.87%.
What a careful desk would check. BTC stood 72.46% below its 52-week high and ETH 92.7% below its own, so a further 9% removes a large share of what remains. A quiet week can precede either a stabilisation or a faster move when activity returns. A desk would ask whether its position sizing assumed volume near the prior 12-week average and whether it would be able to exit into 0.84bn dollars of BTC or 0.19bn dollars of ETH.
Ether against Bitcoin. The two moved closely, with hourly correlation of 0.90, and the ETH/BTC ratio shifted -0.22%. ETH fell slightly more, by 0.20 percentage points, so this was a shared decline rather than a divergence.
What would change this reading
- If a later week closes above this week's open of 3,548.49, the Saturday low reads as a pause rather than a fresh leg down.
- If volume rises above the prior 12-week average while price falls further, the quiet decline has turned into active selling.
- If ETH begins falling faster than BTC and the ETH/BTC ratio drops well beyond -0.22%, the shared decline has become a relative one.
Terms
- realised volatility
- how much the price actually swung over the period, expressed as a yearly percentage
- 52-week high
- the highest price seen in the past 52 weeks; being 72.46% below it means the price is 72.46% lower than that peak
- percentile
- the share of past weeks with a lower value; the 28th percentile means 28% of the 43 weeks recorded were lower