Week of 3 August 2020: Bitcoin gains 5.51%, closing 2.65% below its 52-week high
When both assets rise for a fourth week in five while longs keep paying funding, what does the week's shape say about the strength of the move, and what can it not say?
BTC rose from 11,071.36 to 11,681.68 (+5.51%) and ETH from 372.45 to 390.14 (+4.75%). BTC closed 2.65% below its 52-week high, with volume 1.20 times its prior 12-week average. Funding stayed positive all week for both, averaging 0.0255% per eight hours for BTC.
What the data shows. BTC set its low of 10,936.0 at the week's open, in the first hour of Monday 3 August, then rose to a high of 11,909.94 on Friday 7 August. Its largest hourly move, -1.6%, came later on Monday at 21:00 UTC, so the week's low and its sharpest single hour were separated by most of a day. BTC closed at 76.6% of the week's range, in the upper third, and 2.65% below its 52-week high. The best day was Wednesday 5 August (BTC +4.94%), the worst Friday 7 August (BTC -1.43%). ETH followed the same direction but reversed its path: it set its high of 407.0 on Wednesday 5 August and its low of 362.85 on Friday 7 August, so it fell from its peak to its trough inside a week that still closed up 4.75%. ETH's dollar volume of 2.57 billion was 2.18 times its prior 12-week average, against 4.65 billion, or 1.20 times the average, for BTC. The two assets moved closely hour by hour (correlation 0.80), while ETH lagged slightly, so the ETH/BTC ratio fell 0.72%. This week's BTC return ranked at the 74th percentile of the 129 weeks of history behind it, after a prior four weeks of +2.57%, -1.01%, +7.85% and +11.48%.
What it does not show. The data records prices, volume and funding payments, not causes. Positive funding tells us long positions in perpetual contracts were paying short ones; it does not tell us how large those positions were, who held them, or whether the buying was leveraged. The ETH path from its Wednesday high to its Friday low says nothing about what followed, and nothing here identifies whether that dip was distribution or profit-taking.
What a careful desk would check. Realised volatility, the size of the actual swings scaled to a yearly figure, was 39.7% for BTC and 67.9% for ETH. A week that closes near its top with modest hourly moves (-1.6% at worst for BTC) but positive funding is a week where the cost of holding longs is measurable while the risk of a sharp reversal is not. A desk would ask whether its ETH sizing accounts for a 12.17% weekly range and whether the Friday low of 362.85 would have breached stops set earlier in the week.
What would change this reading
- If BTC trades back below its weekly open of 11,071.36, the upper-third close reads as a level that failed rather than one that held.
- If funding for BTC stays positive at or above its weekly average of 0.0255% per eight hours while price stalls below 11,909.94, longs are paying a carry for a market that has stopped rising.
- If ETH falls faster than BTC again and the ETH/BTC ratio drops more than its -0.72% of this week, the pair has moved from broad strength to a relative shift.
Terms
- funding rate
- the periodic payment between long and short holders of a perpetual futures contract; positive means longs pay shorts
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- percentile
- the share of past weeks with a lower value; the 74th percentile means 74% of the 129 prior weeks were lower