Week of 14 January 2019: both assets rise and both close in the lower third of their range
When two assets rise for the week yet finish near the bottom of their ranges, what does the shape of the week say about the durability of the gains?
BTC rose from 3,477.56 to 3,539.28 (+1.77%) and ETH from 114.17 to 117.47 (+2.89%), both after setting their weekly lows in the first hour of Monday. Both then closed in the lower third of their weekly ranges, with BTC volume only 0.61 times its prior 12-week average.
What the data shows. Both assets set their lows at 00:00 UTC on Monday 14 January (BTC 3,467.02, ETH 113.94) and moved up from there. Monday was also the best day for both (BTC +4.27%, ETH +11.19%) and contained the largest hourly moves in the same hour starting 15:00 UTC (BTC +3.83%, ETH +10.26%). ETH reached its high of 130.05 that Monday evening; BTC peaked later, at 3,720.00 on Saturday 19 January. Despite the weekly gains, both closes sat in the lower third of their ranges (BTC 28.6%, ETH 21.9%), so both weeks finished far below the highs reached earlier in the week. Realised volatility, the size of the swings that actually happened scaled to a yearly figure, was 48.5% for BTC and 103.4% for ETH. BTC dollar volume was 0.72 billion, 0.61 times its prior 12-week average; ETH volume was 0.95 times its average.
What it does not show. The candles record the path, not the reason. Falling volume alongside a positive weekly return does not establish whether buyers were committed or simply scarce. The data cannot say who traded, whether the Monday lift was forced covering or fresh positioning, or whether the faded gains would continue to fade.
What a careful desk would check. BTC sat 69.81% below its 52-week high and ETH 89.87% below its own, so these are rallies inside a longer decline. The prior four weeks were mixed for BTC (+21.69%, -3.25%, +4.85%, -12.81%) and stronger for ETH (+52.37%, +6.77%, +11.65%, -25.82%). Against only 48 weeks of recorded history, this week's return ranked at the 56th percentile for BTC and the 65th for ETH — unremarkable readings that a desk would treat with caution given the short sample.
Ether against Bitcoin. The two moved very closely hour by hour (correlation 0.90), but ETH gained more, lifting the ETH/BTC ratio 1.1%. ETH's range (14.14%) was roughly twice BTC's (7.3%), so ETH offered more movement in both directions, not simply more upside.
What would change this reading
- If BTC closes a later week back above its weekly high of 3,720.00 on heavier volume, this week's fade reads as consolidation rather than a failed rally.
- If volume stays below its prior 12-week average while price drifts lower, the low-volume advance is more likely to be retraced than extended.
- If ETH's advantage over BTC narrows (the ratio falls after +1.1%), the mild rotation into ETH this week was temporary.
- If a later week trades below these weekly lows (BTC 3,467.02, ETH 113.94), Monday's opening low was support rather than a floor.
Terms
- close location
- where the closing price sits within the week's high-to-low range, from the low end to the high end
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- correlation
- how closely two prices moved together hour by hour, from -1 to 1; 0.90 means they moved almost in step