Week of 8 July 2019: Bitcoin drops 10.83% and Ether 25.88% after a mid-week peak
When a market that has risen for weeks reverses and closes near its weekly low, what does the divergence between Bitcoin and Ether reveal about where the selling concentrated?
BTC fell from 11,410.00 to 10,174.18 (-10.83%) and ETH from 304.72 to 225.85 (-25.88%). BTC peaked Wednesday 10 July, ETH Tuesday 9 July; both bottomed at 23:00 UTC on Sunday 14 July. The ETH/BTC ratio dropped 16.88%.
What the data shows. BTC opened the week at 11,410.00, climbed to 13,147.08 by 11:00 UTC on Wednesday 10 July, and then gave it all back, closing at 10,174.18 with the low of 10,103.00 set at 23:00 UTC on Sunday 14 July. ETH peaked earlier, at 318.19 by 02:00 UTC on Tuesday 9 July, and its low of 222.81 came at the same Sunday hour. The weekly range was 30.13% for BTC and 42.81% for ETH. Sunday was the worst day for both: BTC -10.41% and ETH -15.98%, with ETH's largest hourly move of -8.61% landing at 09:00 UTC that day. Both closed in the lower third of their ranges (BTC 2.3%, ETH 3.2%). BTC dollar volume was 1.99 times its prior twelve-week average; ETH's was 0.92 times, below its own average.
What it does not show. Three of the four prior weeks were positive for both assets (BTC: 17.38%, 21.81%, -0.48%, 5.09%; ETH: 15.89%, 15.24%, -5.1%, 4.04%), so this week reversed a mostly rising run. Candles record direction and speed, not reasons. They do not identify who sold, whether positions were closed under pressure, or whether the Sunday low held afterwards.
What a careful desk would check. Realised volatility, the size of the actual hourly swings scaled to a yearly figure, reached 101.8% for BTC and 108.3% for ETH. Against 73 weeks of history, this week's BTC return sat at the 16th percentile and ETH's at the 4th, among the weakest recorded. Notably, BTC was 27.12% below its 52-week high while ETH was 55.5% below, so the two sat at very different distances from their peaks despite moving in the same direction.
Ether against Bitcoin. The pair's hourly correlation was 0.71, close but looser than in a fully shared move, and the ETH/BTC ratio fell 16.88%. ETH fell roughly 2.4 times as far as BTC in percentage terms, and its volume did not rise while BTC's nearly doubled. That combination is consistent with ETH weakening on its own terms, though the data cannot confirm the mechanism.
What would change this reading
- If BTC trades back above its weekly high of 13,147.08 in later weeks, the mid-week reversal reads as a shakeout within the prior uptrend.
- If ETH continues to fall faster than BTC and the ETH/BTC ratio drops further from its -16.88% weekly change, the divergence has become a trend rather than one week.
- If a later week closes below this week's low of 10,103.00 for BTC or 222.81 for ETH, the Sunday bottom was a step down rather than a floor.
- If volume for ETH returns above its prior twelve-week average while price keeps falling, more participation would be behind the weakness.
Terms
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- ETH/BTC ratio
- the price of Ether measured in Bitcoin; it rises when Ether outperforms Bitcoin and falls when it lags
- percentile
- the share of past weeks with a lower value; a low percentile means the week ranked near the bottom of the historical record