Week of 25 May 2020: Bitcoin gains 8.37% and Ether 15.84% on below-average volume
When both assets post strong weekly gains but trade on below-average volume and pay little funding, what does the data support saying about the move's depth, and what does it leave open?
BTC rose from 8,718.14 to 9,448.27 (+8.37%) and ETH from 199.90 to 231.57 (+15.84%), an ETH edge of 7.47 percentage points. Dollar volume ran at 0.75x (BTC) and 0.78x (ETH) the prior 12-week average. BTC's gain ranked at the 82nd percentile and ETH's at the 93rd of 119 recorded weeks, while both closed more than 32% below their 52-week highs.
What the data shows. Both markets rose in the same direction, with ETH ahead. BTC set its low of 8,642.72 in the week's opening hour on Monday 25 May and its high of 9,740.00 at 23:00 UTC on Saturday 30 May; ETH's low of 196.90 came Tuesday 26 May and its high of 247.00 at 22:00 UTC on Saturday, an hour when both assets posted their largest hourly moves of the week (2.5% for BTC, 2.7% for ETH, recorded as magnitudes). The best days were Wednesday 27 May for BTC (+4.11%) and Saturday 30 May for ETH (+10.44%). Both closed in the upper third of their weekly ranges, then both had their worst day on Sunday 31 May (BTC -2.57%, ETH -4.98%). Hourly correlation was 0.76 and the ETH/BTC ratio rose 6.89%, so the two moved closely but ETH clearly led. Volume was light: 3.93 billion dollars for BTC and 1.00 billion for ETH, each below the prior twelve-week average.
What it does not show. Rising prices on below-average volume cannot tell us whether the move had broad participation or a thin book. Funding was nearly flat (BTC averaging 0.0026% per eight hours, with a minimum of -0.014%; ETH fixed at 0.01%), which does not indicate heavy leverage on either side, but the data carries no open-interest or order-book figures to size positions. Nothing here explains why ETH outperformed, and nothing indicates what followed the Sunday giveback.
What a careful desk would check. Realised volatility, the size of actual swings scaled to a yearly figure, was 46.8% for BTC and 61.5% for ETH, so ETH carried more risk per unit of move. Both assets still sat 32.32% (BTC) and 35.29% (ETH) below their 52-week highs after strong weeks. A desk would test whether the volume shortfall was made up in the Saturday hours, where the week's highs and largest hourly moves clustered.
What would change this reading
- If volume in later weeks expands while price holds above this week's close, the low-volume caveat on this rally weakens.
- If the ETH/BTC ratio falls back by more than the 6.89% it gained, the outperformance reads as a short-lived rotation rather than a trend.
- If Sunday's reversal continues below this week's low of 8,642.72 (BTC) or 196.90 (ETH), the weekly gains were distribution rather than accumulation.
- If funding rises well above the near-flat levels seen here, leverage is arriving after the move, which changes the risk profile.
Terms
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- funding rate
- the periodic payment between long and short holders of a perpetual futures contract; positive means longs pay shorts
- ETH/BTC ratio
- the price of one Ether expressed in Bitcoin, showing which asset is gaining against the other