Week of 11 May 2020: Bitcoin and Ether each gain about 10% after a Monday low
When both assets fall to a weekly low early in the week and then recover, what can the shape of that week tell us about the recovery, and what does it leave open?
BTC rose from 8,722.77 to 9,680.04 (+10.97%) and ETH from 187.62 to 207.00 (+10.33%). Both set their weekly lows in the same hour, 18:00 UTC on Monday 11 May. The BTC weekly return ranked at the 86th percentile of the 117 weeks recorded before it.
What the data shows. Both assets bottomed together: BTC at 8,200 and ETH at 176.00, both in the hour starting 18:00 UTC on Monday 11 May. From there the week climbed. BTC reached its high of 9,939.00 on Thursday 14 May, while ETH set its high of 209.85 only on Sunday 17 May, so the two were not perfectly in step at the end. Both closed near the top of their weekly range (close location 85.1% for BTC, 91.6% for ETH). The best day was Wednesday 13 May for both (+5.66% BTC, +5.17% ETH) and the worst was Friday 15 May (-4.86%, -4.15%). The week immediately before this one was a loss for both assets (BTC -1.93%, ETH -10.64%), following three weekly gains (BTC 3.14%, 8.03% and 15.61%; ETH 13.54%, 9.64% and 6.32%). BTC stood 30.66% below its 52-week high at the close, ETH 42.16% below.
What it does not show. The candles record the path, not the reason. Nothing here identifies who bought after Monday or whether the buying was new positioning or the closing of earlier shorts. The week says nothing about what follows: a close near the high is a fact about Sunday, not a forecast.
What a careful desk would check. Volume tells two different stories. BTC dollar volume was 1.36 times its prior twelve-week average, while ETH volume was 0.89 times, below its own average. A gain of similar size on rising volume in one asset and falling volume in the other is worth separating. Realised volatility (the size of the actual swings, scaled to a yearly figure) was 74.8% for BTC and 62.9% for ETH.
Ether against Bitcoin. The ETH/BTC ratio changed -0.58%, and hourly correlation was 0.83. The pair moved together broadly, with BTC marginally ahead.
What would change this reading
- If a later week trades below the Monday low of 8,200 for BTC, this week's recovery reads as a bounce inside a broader decline rather than a turn.
- If ETH takes out its Sunday high of 209.85 while BTC stays below 9,939.00, the lag visible in ETH's volume becomes the story to watch.
- If funding stays positive at levels near 0.0089% per eight hours while price stalls, longs keep paying for a position that has stopped rising.
- If BTC remains 30.66% or more below its 52-week high in later weeks, the percentile reading of this week describes strength inside a still-depressed market.
Terms
- close location
- where the closing price sits between the week's low and high; a high figure means the week ended near its top
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- perpetual funding
- a regular payment between long and short holders of a perpetual futures contract that keeps its price close to the spot price