Week of 28 January 2019: BTC and ETH fall on volume at half the twelve-week average
When two crypto assets fall together but on very light volume, what does the week say about the strength of the decline, and what can it not say?
BTC fell from 3,550.05 to 3,458.11 (-2.59%) and ETH from 112.04 to 107.36 (-4.18%). Dollar volume for both was 0.54 times the prior twelve-week average. Realised volatility was 28.6% for BTC and 56.9% for ETH.
What the data shows. Both assets set their weekly highs in the first hour on Monday 28 January: BTC reached 3,557.75 and ETH 112.87, each just above its open. Monday was also the worst day (BTC -3.26%, ETH -5.84%), with ETH reaching its low of 100.91 at 15:00 UTC the same day. BTC bottomed later, at 3,349.92 on Tuesday 29 January at 07:00 UTC. Wednesday 30 January produced the best day for both (BTC +1.41%, ETH +3.72%) and ETH's largest hourly move, +2.7% in the hour starting 12:00 UTC. Hourly correlation was 0.84, and the ETH/BTC ratio fell 1.63%, so ETH lost more than BTC but the two broadly tracked each other. Both closes sat near the middle of their weekly ranges (52.1% for BTC, 53.9% for ETH), and dollar volume was 0.54 times the prior twelve-week average for each.
What it does not show. Light volume limits what can be inferred. A 2.59% weekly decline traded on roughly half the usual dollar volume is consistent with drift rather than forced selling, but the data cannot confirm that, nor identify who was trading. The prior four weeks for BTC (+4.85%, -12.81%, +1.77%, +0.33%) show no steady direction to place this week inside.
What a careful desk would check. Realised volatility of 28.6% for BTC against a largest hourly move of -1.17% suggests a slow grind, not a shock. With BTC 70.5% below its 52-week high and ETH 89.12% below, both remain deep in decline; a quiet week at these levels says nothing about whether the low is in. A desk would compare its position sizing with the 6.2% and 11.85% weekly ranges rather than assume calm continues.
Ether against Bitcoin. The ratio change of -1.63% and the -1.59 percentage point gap between returns mark a mild rotation towards BTC. Three of the prior four weeks showed a larger gap between the two returns than this week's -1.59 percentage points.
What would change this reading
- If volume returns towards its twelve-week average while price holds near this week's lows, the quiet decline reads as consolidation rather than exhaustion.
- If a later week trades below BTC's 3,349.92 or ETH's 100.91, this week becomes a pause inside a continuing decline.
- If the ETH/BTC ratio keeps falling while both assets rise, the mild rotation towards BTC is becoming a trend.
Terms
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- close location
- where the weekly close sits between the week's low and high, in percent
- hourly correlation
- how closely two prices moved together hour by hour, from -1 to 1