Week of 29 June 2020: a quiet week leaves BTC flat and ETH 1.19% higher
When prices barely move on well-below-average volume and the two majors part ways, what does the week actually establish about direction?
BTC fell from 9,116.16 to 9,069.41 (-0.51%) while ETH rose from 224.89 to 227.56 (+1.19%). BTC's total range was 4.49% and its dollar volume was just 0.51 times its prior 12-week average. Both assets remained roughly 30% below their 52-week highs.
What the data shows. Both assets moved inside narrow bands and closed near the middle of their weekly ranges: BTC's close sat at the 44.2% mark of its range, ETH's at 55.0%. BTC peaked on Wednesday 1 July at 9,292.00 and bottomed on Sunday 5 July at 8,893.03, while ETH put in its low on Monday 29 June at 221.26 before rising to 232.71 on Wednesday. The largest hourly moves were small (-1.59% for BTC on Thursday 2 July, +1.77% for ETH on Saturday 4 July). The two assets still moved closely together, with an hourly correlation of 0.86, but ETH outperformed by 1.7 percentage points, and the ETH/BTC ratio rose 1.71%. Trading activity was light: BTC dollar volume of 2.26 billion was 0.51 times its prior 12-week average, ETH's 0.70 billion was 0.63 times. This week's loss was BTC's fourth consecutive down week, and its return ranked at the 42nd percentile of the 124 weeks of history recorded before it.
What it does not show. A quiet week with low volume does not tell us whether the market was accumulating, losing interest, or simply between flows. Nothing here identifies who traded or what they expected. The small divergence between the assets cannot be read as a lasting shift in relative strength from one week of data.
What a careful desk would check. Realised volatility, the size of the swings that actually happened scaled to a yearly figure, was 23.9% for BTC and 36.5% for ETH. Position sizing set during more volatile weeks may be conservative here, but the reverse is also worth testing: a desk comparing this week's calm with the prior four weeks, which included moves of -4.15% and 3.16% for BTC, would ask whether the compression precedes a wider range rather than assuming it persists.
Funding. Perpetual funding averaged 0.01% per eight hours for both assets, with no variation between the high and the low. Longs were paying a token amount to shorts, a reading consistent with positioning that was neither crowded nor stressed.
What would change this reading
- If BTC later trades below this week's low of 8,893.03, the quiet range reads as a pause inside the three down weeks that preceded it.
- If volume returns towards its prior 12-week average while price holds the middle of this week's range, the week's indecision resolves rather than repeats.
- If the ETH/BTC ratio continues rising after a 1.71% weekly gain, ETH's outperformance becomes a trend rather than one week of divergence.
Terms
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- hourly correlation
- how closely two prices moved together hour by hour, from -1 to 1
- close location
- where the closing price fell within the week's high-to-low range, as a percentage