Week of 17 December 2018: Bitcoin rises 21.69% and Ether 52.37% after weeks of decline
After several losing weeks, what can a single sharply higher week say about whether a decline is turning, and what does it leave unproven?
BTC rose from 3,229.22 to 3,929.71 (+21.69%) and ETH from 84.68 to 129.03 (+52.37%). Both lows came on Monday 17 December and both assets closed near the top of their weekly ranges. The weekly returns ranked at the 98th and 100th percentiles of the 44 weeks of history recorded.
What the data shows. The week opened near its lows: BTC's low of 3,216.00 and ETH's low of 84.40 both arrived at 02:00 UTC on Monday 17 December, and both highs came later. The largest single hourly moves were +5.14% for BTC (the hour starting 08:00 UTC on Thursday 20 December) and +6.61% for ETH (the hour starting 00:00 UTC on Sunday 23 December). The best day for both was Thursday 20 December (BTC +10.65%, ETH +15.52%); the worst was Friday 21 December (BTC -5.26%, ETH -5.29%). Dollar volume was 1.57 times the prior twelve-week average for BTC and 1.44 times for ETH. BTC closed at 77.2% of its weekly range and ETH at 93.9%, both in the upper third.
What it does not show. Four weeks before this one, BTC was down three of four (-27.84%, 1.77%, -14.79%, -9.01%) and ETH down all four (-33.72%, -1.75%, -20.04%, -9.21%). A strong week after a decline does not establish a reversal; the data records only 44 weeks of history, a short baseline for percentiles. No funding figures are available for this week, so nothing here measures leveraged positioning. At the close BTC was still 66.48% below its 52-week high and ETH 88.87% below its own.
What a careful desk would check. Realised volatility, the size of the swings that actually happened scaled to a yearly figure, reached 101.0% for BTC and 146.0% for ETH. ETH moved with BTC closely (hourly correlation 0.85) but gained 30.68 percentage points more over the week, lifting the ETH/BTC ratio 25.21%. A desk would check whether later weeks hold above this week's opening levels before reading the gain as anything more than one week's data.
Ether against Bitcoin. ETH's 52.37% gain came off a deeper base: it had fallen further in each of the four prior weeks and sits 88.87% below its 52-week high. The outperformance measures relative movement within the week, not a change in the longer-standing relationship between the two prices.
What would change this reading
- If later weeks close below this week's opens of 3,229.22 for BTC and 84.68 for ETH, the gain reads as a rebound inside a continuing decline.
- If ETH gains slow relative to BTC after a 25.21% ratio jump, the outperformance was specific to this week rather than a durable shift.
- If volume falls back towards its prior twelve-week average, the conviction behind this week's move is not being repeated.
- If realised volatility stays near 101.0% for BTC and 146.0% for ETH, position sizing calibrated to quieter weeks remains inappropriate.
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 98th percentile means 98% of past weeks were lower
- hourly correlation
- how closely two prices moved together hour by hour, from -1 to 1