Week of 21 January 2019: Bitcoin ends flat at 3,550.84 while Ether falls 4.69% on thin volume
When Bitcoin barely moves but Ether loses nearly 5% in the same week, what does the divergence in a low-volume week tell us about relative weakness?
BTC closed 3,550.84, up 0.33%, while ETH fell from 117.56 to 112.05 (-4.69%). Volume for both was 0.46 times the prior 12-week average. The ETH/BTC ratio fell 5.0%, and hourly correlation between the two was 0.74, a close but imperfect co-movement.
What the data shows. BTC traded a 6.64% range, from a low of 3,434.85 at 11:00 UTC on Tuesday 22 January to a high of 3,662.94 at 07:00 UTC on Saturday 26 January. It closed in the middle third of that range, with a close location of 50.9%. ETH's path differed: its high of 119.49 came at 19:00 UTC on Tuesday 22 January, and its low of 111.04 arrived at 14:00 UTC on Sunday 27 January, so the low sat after the high. ETH closed in the lower third of its range, with a close location of 12.0%. Hourly correlation between the two assets was 0.74, a level the source labels close, while the ETH/BTC ratio fell 5.0%.
What it does not show. Volume for both was well below its prior 12-week average, with dollar volume of 0.55 billion for BTC and 0.2 billion for ETH, so the divergence came in a quiet market where a small amount of flow can move price. The data does not identify who was trading or why ETH lagged. It also cannot say whether the ratio decline continued into the next week. BTC was 69.71% below its 52-week high and ETH 90.33%, but these figures measure distance, not direction.
What a careful desk would check. Realised volatility, the size of the actual swings scaled to a yearly figure, was 25.3% for BTC and 38.6% for ETH. ETH's larger swings sat alongside a wider range and a lower close location. A desk would ask whether its ETH sizing assumed BTC-like volatility, and whether a ratio-based hedge would have captured the week.
Ether against Bitcoin. The ratio fell 5.0%, and ETH's weekly return trailed BTC's by 5.02 percentage points. This was a relative move, not a shared one.
What would change this reading
- If the ETH/BTC ratio keeps falling while BTC holds near 3,550.84, the week marks the start of a sustained divergence rather than a one-week lag.
- If volume returns towards its prior 12-week average, the week's flat BTC close reads as indecision rather than a firm base.
- If ETH closes a later week above its high of 119.49, the Sunday low of 111.04 reads as a temporary extreme.
- If BTC trades below its Tuesday low of 3,434.85, the flat weekly close becomes less convincing.
Terms
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- close location
- where the week's closing price sits between the week's low and high, as a percentage
- ETH/BTC ratio
- the price of one Ether measured in Bitcoin, showing whether ETH is gaining or losing against BTC