Week of 29 April 2019: Bitcoin gains 8.77% while Ether trails by 5.48 points
When Bitcoin and Ether rise in the same week but by different amounts, what does the gap in returns, volumes and distance from their highs reveal about where the two markets stood?
BTC rose from 5,309.81 to 5,775.62 (+8.77%) and ETH from 157.86 to 163.05 (+3.29%). Both hit their weekly low and high in the same respective hours. Hourly correlation was 0.68 and the ETH/BTC ratio fell 5.04%, so BTC led and drew above-average volume (1.11x) while ETH volume sat below average (0.79x).
What the data shows. Both assets bottomed in the same hour: BTC's low of 5,178.80 and ETH's low of 152.00 came at 13:00 UTC on Monday 29 April. Both weekly highs also landed in one hour, 01:00 UTC on Saturday 4 May, at 5,900.00 for BTC and 171.30 for ETH. BTC closed at 5,775.62, in the upper third of its range (82.8% of the way up), while ETH closed at 163.05, mid-range (57.3%). BTC's best day was Friday 3 May (+5.06%), its worst Monday (-1.35%); ETH's best was Tuesday 30 April (+4.31%), its worst Saturday (-2.62%). BTC dollar volume was 1.07 billion, or 1.11 times its prior twelve-week average; ETH dollar volume was 0.31 billion, or 0.79 times, below average. The two markets moved together only loosely (hourly correlation 0.68), and the ETH/BTC ratio fell 5.04%, so this was a Bitcoin-led week rather than a common move.
What it does not show. The data carries no funding rates, so the cost of holding leveraged positions cannot be read here. Nor does it say why ETH lagged: a loose correlation and a falling ratio describe the divergence without identifying its source. The prior four weeks were mixed for ETH (23.19%, -4.05%, 0.83%, -6.37%) against a much stronger run for BTC (26.03%, -0.75%, 2.43%, 0.95%), which is context, not cause.
What a careful desk would check. Realised volatility, the size of the swings that actually happened scaled to a yearly figure, was 42.9% for BTC and 49.9% for ETH. Weekly ranges were 13.93% and 12.7%, yet BTC's largest hourly move was only -2.46% (Saturday 13:00 UTC) and ETH's +3.17% (Friday 09:00 UTC), so the week's gains accumulated gradually rather than through one hour. A desk would ask whether ETH's below-average volume alongside BTC's above-average volume marks a durable rotation or a single week's quirk.
Ether against Bitcoin. ETH's weekly return ranked at the 67th percentile of the prior 63 weeks; BTC's ranked at the 87th. Distance from the 52-week high also differed sharply: BTC was 42.05% below its high, ETH 80.58% below. ETH lagged in return, in volume and in recovery from its peak at once.
What would change this reading
- If ETH volume rises back above its prior twelve-week average while its return closes the 5.48-point gap to BTC, the divergence reads as temporary.
- If the ETH/BTC ratio keeps falling after a -5.04% week, Bitcoin leadership is extending rather than rotating back.
- If BTC trades below its weekly low of 5,178.80 in a later week, the gradual ascent of this week reads as a pause inside a larger decline.
- If hourly correlation climbs well above 0.68, the loose coupling of this week was an exception and hedges between the two assets behave differently.
Terms
- hourly correlation
- how closely two prices moved together hour by hour, from -1 to 1; 0.68 is loose
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- ETH/BTC ratio
- the price of one Ether expressed in Bitcoin, showing whether ETH is gaining or losing against BTC