Week of 13 July 2020: Bitcoin and Ether edge lower on volume below the recent average
When both majors drift down on thin volume and near-flat funding, what does the week say about conviction, and what does it leave unresolved?
BTC fell 1.01% (9,303.31 to 9,208.99) and ETH 1.50% (242.76 to 239.11) in a narrow 3.28% and 6.66% range. Dollar volume was 2.28bn for BTC and 0.71bn for ETH, equal to 0.54 and 0.67 times their prior twelve-week averages. Both closed in the middle third of their weekly ranges, and both remained 24.64% and 16.38% below their 52-week highs.
What the data shows. Both assets peaked at the same hour, 12:00 UTC on Monday 13 July (BTC 9,343.82, ETH 245.33), then slid to their lows on Thursday 16 July (BTC 9,047.25 at 10:00 UTC, ETH 230.02 at 07:00 UTC) before recovering into Sunday. The best day for both was Sunday 19 July (BTC +0.42%, ETH +1.46%) and the worst was Thursday (BTC -0.69%, ETH -2.10%). Hourly moves were small: the largest was -0.59% for BTC on Monday evening and -1.26% for ETH on Thursday morning. Realised volatility, the size of the swings that actually happened scaled to a yearly figure, was 15.4% for BTC and 27.4% for ETH. The two moved closely (hourly correlation 0.81) but ETH fell slightly more, so the ETH/BTC ratio changed -0.49%.
What it does not show. Thin volume tells us trading activity was below its recent norm, but not why. The data identifies no cause, no buyer or seller type, and nothing about what followed. The small range could reflect balance between buyers and sellers, or simply low participation; candles cannot distinguish them.
What a careful desk would check. The weekly return ranked at the 37th percentile for BTC and 41st for ETH across 126 weeks, so this was a mildly negative but unremarkable week. Both closes sat in the middle third of their ranges, a sign that neither side held the week's end. After three of the prior four weeks being down for BTC, a desk would ask whether the low-volume drift marks accumulation or neglect, and would treat the Thursday lows of 9,047.25 and 230.02 as the nearest reference points.
Funding. BTC funding was flat at 0.0100% per eight hours all week; ETH averaged 0.0101% with a high of 0.0129%. Longs paid a small, steady carry, indicating neither crowding nor stress in perpetual positioning.
What would change this reading
- If BTC trades below its weekly low of 9,047.25 on heavier volume, the quiet drift reads as the start of a move rather than a pause.
- If volume returns towards its prior twelve-week average while price holds above 9,208.99, the low-volume week reads as consolidation.
- If ETH continues to fall faster than BTC and the ratio drops further from its -0.49% change, the relative picture has shifted, which changes which hedge matters.
- If funding stays at 0.01% while volatility rises from 15.4%, positioning has not yet adjusted to the wider swings.
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
- funding rate
- the periodic payment between long and short holders of a perpetual futures contract; positive means longs pay shorts