Week of 25 February 2019: Bitcoin adds 1.71% while Ether loses 1.14%
When Bitcoin and Ether fall to their weekly low in the same hour yet close the week in opposite directions, what does that ask about reading two assets as one market?
BTC rose from 3,743.56 to 3,807.75 (+1.71%); ETH fell from 132.10 to 130.60 (-1.14%). Both set their weekly low at 20:00 UTC on Wednesday 27 February, in the same hour as each asset's largest hourly move. The ETH/BTC ratio fell 2.8%, and volume was light for BTC at 0.75 times its prior twelve-week average.
What the data shows. BTC traded between 3,677.17 and 3,888.00, a range of 5.73%, and closed at 61.9% of that range. ETH ranged from 126.84 to 141.55, a range of 11.6% — about twice as wide — and closed at 25.6% of its range, near the bottom. The two assets shared a turning point: at 20:00 UTC on Wednesday 27 February both hit their weekly low and recorded their largest hourly move, -1.89% for BTC and -4.43% for ETH. They still moved together closely hour by hour (correlation 0.86). Both had their best day on Monday 25 February (BTC +2.25%, ETH +4.37%), but their worst days differed: Tuesday 26 February for BTC (-0.5%), Saturday 2 March for ETH (-2.04%). Dollar volume was $0.73bn for BTC, 0.75 times its prior twelve-week average, and $0.44bn for ETH, 1.01 times its average.
What it does not show. The candles do not say why Ether gave back Monday's gain while Bitcoin held on. Perpetual funding fields are absent for this week, so no crowding reading is available. A single week's divergence does not establish a change in the relative trend.
What a careful desk would check. Realised volatility, the size of the swings that actually happened scaled to a yearly figure, was 28.5% for BTC and 65.7% for ETH. A position sized off BTC's volatility would be more than twice as large as the same ETH exposure warrants. Both markets remain deep below their 52-week highs: BTC 67.37% and ETH 84.98%. The return percentiles, 54 for BTC and 56 for ETH across 54 weeks of recorded history, sit near the middle, so neither week was extreme by this short history.
Ether against Bitcoin. The ETH/BTC ratio fell 2.8% and the return gap was -2.85 percentage points. ETH ran ahead on Monday and then fell back further and later than BTC, which is consistent with a wider-ranging asset losing more ground, not with the two markets separating.
What would change this reading
- If the ETH/BTC ratio falls again in a later week, this week's -2.8% reads as the start of a divergence rather than a one-week fluctuation.
- If BTC trades back below its weekly low of 3,677.17, the Wednesday 20:00 UTC turn was a pause rather than support.
- If ETH closes a later week in the upper part of its range instead of 25.6%, the weak finish here looks temporary.
- If volume rises well above BTC's $0.73bn while price holds near 3,807.75, the light-traded character of this week changes.
Terms
- close location
- where the weekly close sits between the week's low and high, as a percentage; a value near the low end means a weak finish to the week
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- hourly correlation
- how closely two prices moved together hour by hour, from -1 to 1