Week of 20 April 2020: fifth straight weekly gain on below-average BTC volume
When a market rises for a fifth straight week on below-average volume and near-zero funding, what does the price data confirm, and what does it leave open about the quality of the rally?
BTC rose from 7,121.40 to 7,693.10 (+8.03%) and ETH from 180.02 to 197.38 (+9.64%), with both closing in the upper third of their weekly ranges. Both weekly lows came on Monday 20 April and both rises extend a fifth consecutive up week. BTC dollar volume was 0.77 times its prior 12-week average; ETH's was 1.11 times.
What the data shows. Both assets set their weekly lows at the same hour: BTC's 6,751.00 and ETH's 166.70 both came at 20:00 UTC on Monday 20 April, the worst day for both (BTC -4.14%, ETH -5.45%). BTC then rose to 7,738.00 on Thursday 23 April, its best day at +5.01%, in the same hour as its largest hourly move (+4.18%). ETH finished later, setting its high of 200.00 on Sunday 26 April. ETH gained more than BTC (+9.64% against +8.03%), lifting the ETH/BTC ratio by 1.5%. Both returns sit high in their history: 82nd percentile for BTC, 80th for ETH, across 114 weeks. Both remain 44.89% and 44.84% below their 52-week highs.
What it does not show. A fifth consecutive up week and an 82nd-percentile return describe persistence, not cause. The data carries no information about who was buying or whether the buying came from new entrants or short covering. BTC's dollar volume of 3.40 billion dollars was 0.77 times its prior twelve-week average, so this gain came on lighter activity than the weeks before; thinner volume can mean either a lack of sellers or a lack of conviction, and prices alone cannot separate the two.
What a careful desk would check. Realised volatility, the size of the swings that actually happened scaled to a yearly figure, was 54.6% for BTC and 81.6% for ETH, so ETH's daily swings ran about 1.5 times BTC's in yearly terms. A desk would compare these levels with the four prior up weeks (BTC 1.12%, 15.17%, 1.93%, 3.14%) and ask whether stops and position sizes still fit a market whose weekly gains have varied this widely.
Funding. BTC perpetual funding averaged -0.0001% per eight hours, effectively flat, with a low of -0.0312%. ETH funding held at 0.01% for the whole week. Neither reading shows leveraged longs paying meaningfully to stay in, so this rally was not visibly carried by crowded long positioning in perpetuals.
What would change this reading
- If a later week closes below BTC's 6,751.00 low, the fifth straight gain reads as an extension that has been reversed rather than a durable trend.
- If BTC volume returns above its prior twelve-week average while price stalls, the lighter activity of this week looks more like absent demand than absent supply.
- If the ETH/BTC ratio change of 1.5% unwinds, ETH's extra gain this week was a rotation rather than durable outperformance.
Terms
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- close location
- where the week's closing price sits between the week's low and high; upper third means it finished near the top of the range
- percentile
- the share of past weeks with a lower value; the 82nd percentile means 82% of the prior 114 weeks were lower