Week of 23 March 2020: both assets rise but close low in a wide range
When a week ends with a small gain after a strong start and a long fade, what does the shape of the week say about the strength of the recovery, and what does it leave uncertain?
BTC rose from 5,816.05 to 5,881.42 (+1.12%) and ETH from 122.31 to 124.50 (+1.79%), yet both closed in the lower third of their weekly ranges. BTC swung 22.33% from low to high, with the best day on Monday (+11.2%) and the worst on Sunday (-5.7%).
What the data shows. The lows came early: BTC at 5,688 and ETH at 119.5, both at 00:00 UTC on Monday 23 March, 2.25% and 2.35% below the week's opening prices of 5,816.05 and 122.31. Both then gained more than 11% that day and peaked mid-week, BTC at 6,957.96 on Wednesday 25 March and ETH at 143.36 on Tuesday 24 March. From those highs the market faded, so the week closed with BTC 15.2% and ETH 21% of the way up from their lows, in the lower third of each week's range. BTC realised volatility (how much price actually swung, scaled to a yearly figure) was 105.1% and ETH's 103.0%. The largest hourly move for both came in the same hour, +8.23% for BTC and +8.12% for ETH at 12:00 UTC on Monday. BTC dollar volume was 4.96 billion, 1.24 times its prior twelve-week average; ETH's was 0.88 billion, 0.87 times its prior twelve-week average.
What it does not show. The candles show the path and the fade, not the reason for either. Nothing here says who bought on Monday or who sold into Wednesday and Thursday, and no measure of positions or orders is included. The small weekly gain does not establish that a low is in place. At week's end BTC stood 57.87% below its 52-week high and ETH 65.21% below its own.
What a careful desk would check. A 22.33% range on a +1.12% week means position sizing based on the weekly return alone would misstate risk. A desk would compare stops and margin buffers with the 8.23% hourly move and ask whether the lower-third close is consolidation or distribution; the next weeks decide between those readings.
Funding. BTC funding averaged -0.0044% per eight hours, with a low of -0.0413%, so shorts paid longs on average. ETH averaged 0.0094%, its low -0.0027%. The two assets therefore sat on different sides of that cost.
What would change this reading
- If a later week closes above this week's high of 6,957.96 for BTC, the fade reads as a pause inside a recovery.
- If BTC falls back below this week's low of 5,688, the Monday rebound is unlikely to mark a turning point.
- If ETH keeps outperforming BTC as it did by 0.67 percentage points this week, the recovery is not uniform across the two assets.
Terms
- realised volatility
- how much the price actually moved over a period, expressed as a yearly percentage
- funding rate
- a regular payment between long and short holders of a perpetual futures contract; negative means shorts pay longs
- 52-week high
- the highest price recorded over the past year