Week of 31 December 2018: Ether outgains Bitcoin by 6.8 points after a shared Monday low
When Bitcoin and Ether bottom in the same hour but finish the week far apart in return and volume, what does the split tell a desk about reading a recovery?
BTC rose from 3,803.12 to 3,987.60 (+4.85%) and ETH from 137.81 to 153.86 (+11.65%). Both hit their weekly low at 19:00 UTC on Monday 31 December. BTC volume was 0.66 times its prior 12-week average, while ETH volume was 1.90 times.
What the data shows. Both assets put in their low in the same hour: BTC at 3,630.33 and ETH at 128.70, at 19:00 UTC on Monday 31 December. From there both rose into the close, finishing at 89.9% (BTC) and 82.3% (ETH) of their weekly ranges. BTC reached its high late on Sunday 6 January at 4,027.71, in the same late-day stretch as a +5.08% hour starting 17:00 UTC and a best day of +5.74%. ETH peaked earlier, at 159.26 early on Saturday 5 January, after a best day of +9.28% on Wednesday 2 January. Realised volatility, the size of the swings that actually happened scaled to a yearly figure, was 55.4% for BTC and 92.2% for ETH. Both remained far below their 52-week highs: BTC by 65.99%, ETH by 86.73%.
What it does not show. The candles do not say why the two assets diverged or who drove the buying. Hourly correlation, how closely the two prices moved together hour by hour, was 0.69, which the data labels as loose (below 0.7), so the shared Monday low did not extend into a tight week-long fit. Volume moved in opposite directions: BTC traded at 0.66 times its prior 12-week average while ETH traded at 1.90 times, and the data cannot say what sat behind either figure.
What a careful desk would check. The percentile ranking of the return (76th for BTC, 87th for ETH) rests on only 46 weeks of history, so it is a weak comparison set. A desk would also note that the prior four weeks held three down weeks for BTC and two for ETH, with large swings (ETH +52.37% two weeks earlier), making this week part of a volatile stretch rather than a clean turn.
Ether against Bitcoin. The ETH/BTC ratio rose 6.48%, and ETH beat BTC by 6.80 percentage points. The gap came with looser hourly correlation, so a hedge between the two would have tracked less tightly this week than the ratio move alone suggests.
What would change this reading
- If BTC trades below its weekly low of 3,630.33, Monday's floor stops being the reference point for this recovery.
- If the ETH/BTC ratio gives back the 6.48% rise, this week's outperformance reads as temporary rather than a change in leadership.
- If BTC dollar volume stays near 0.66 times its 12-week average while price holds near 3,987.60, the gain rests on thin activity and needs confirmation.
- If hourly correlation climbs well above 0.69 in later weeks, the loose fit of this week was the exception.
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; here it compares against only 46 weeks of recorded history
- ETH/BTC ratio
- the price of Ether divided by the price of Bitcoin; it rises when Ether outperforms Bitcoin