Week of 17 February 2020: Ether gains 6.02% while Bitcoin ends nearly flat
When Ether rises 6% in a week Bitcoin barely moves, what does the data show about the gap between them, and what can it not show about its cause?
BTC went from 9,910.70 to 9,936.40 (+0.26%); ETH from 258.89 to 274.48 (+6.02%). Ether beat Bitcoin by 5.76 percentage points and the ETH/BTC ratio rose 5.75%. Both assets had their best day on Tuesday and their worst on Wednesday. Perpetual funding stayed positive for both.
What the data shows. Both assets topped out on Tuesday: BTC reached 10,250.00 at 21:00 UTC and ETH 285.88 at 20:00 UTC, both late in the UTC day. Wednesday was the worst day for both (BTC -5.62%, ETH -8.56%), and the largest hourly move landed in the same late-UTC hour, -5.29% for BTC and -4.49% for ETH, when BTC set its weekly low of 9,350.00. ETH had already set its low earlier, 242.00 at 04:00 UTC on Monday, so its low preceded its high. Weekly ranges were 9.63% for BTC and 18.13% for ETH. Volume ran above the prior twelve-week average for both, more so for ETH (2.74 times) than BTC (1.19 times). BTC closed in the middle third of its range, ETH in the upper third. ETH had been up for four straight weeks before this one; BTC's prior four were mixed (-1.00%, 8.32%, 8.79%, -2.31%). Both remain below their 52-week highs: BTC by 28.83%, ETH by 23.30%.
What it does not show. The data records where prices went, not why Ether outperformed by 5.76 percentage points or who drove the volume. Nothing here says whether the gap will persist or close. The Wednesday hour shows both assets falling together, so the divergence in weekly returns did not protect Ether from the sharpest hour of the week.
What a careful desk would check. Realised volatility, the size of the swings that actually happened scaled to a yearly figure, was 91.6% for ETH against 55.2% for BTC. ETH's 6.02% gain came with realised volatility about two-thirds higher than BTC's, so a position sized on BTC alone would be too large for ETH. BTC's weekly return ranked at the 48th percentile of the 105 weeks recorded, ETH's at the 72nd. A desk would compare its stop distances with Wednesday's hourly moves rather than with the average week.
Ether against Bitcoin. The ETH/BTC ratio rose 5.75%, and hourly correlation between the two was 0.78, a close reading. The two moved in the same direction, but not to the same degree: ETH ranged 18.13% against BTC's 9.63% and finished near the top of its range.
Funding. Perpetual funding, the periodic payment between long and short holders of a futures contract, was positive throughout for both. ETH averaged 0.0518% per eight hours (high 0.0956%), BTC 0.0294% (high 0.0911%). Long positions were paying short ones, at a higher rate for Ether.
What would change this reading
- If BTC trades below this week's low of 9,350.00 in a later week, the Wednesday drop reads as a warning rather than a one-day shakeout.
- If the ETH/BTC ratio gives back part of its 5.75% weekly rise, this week's divergence looks temporary rather than a change in relative trend.
- If ETH's realised volatility stays near 91.6% while BTC's stays near 55.2%, position sizing calibrated on BTC alone continues to understate ETH risk.
- If funding turns negative while prices hold near these levels, the cost of holding long perpetual positions eases for the first time in the period shown.
Terms
- 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; it rises when Ether outperforms Bitcoin
- perpetual funding
- a regular payment between long and short holders of a perpetual futures contract; positive means longs pay shorts