Week of 7 September 2020: BTC and ETH end higher, with ETH ahead by 3.1 points
After a sharp prior week, what does a modest weekly gain on lighter BTC volume say about whether the decline has paused, and how much of the move belongs to Ether rather than Bitcoin?
BTC rose from 10,255.89 to 10,332.83 (+0.75%) and ETH from 352.85 to 366.42 (+3.85%). Both set their highs at 04:00 UTC on Sunday 13 September, after lows on Tuesday and Monday. BTC dollar volume was 0.91 times its prior 12-week average, while ETH volume was 1.37 times.
What the data shows. Both put in their lows before their highs. BTC bottomed at 9,850.00 at 22:00 UTC on Tuesday 8 September, its worst day at -2.38%, then reached 10,580.11 early on Sunday 13 September. ETH's low of 323.00 came at 12:00 UTC on Monday 7 September, with a 20.88% range from low to high against BTC's 7.41%. BTC's largest hourly move was +2.26%, late in the day on Monday 7 September. Both closed in the middle third of their weekly ranges. The two moved closely hour by hour (correlation 0.89), but ETH gained more, lifting the ETH/BTC ratio 3.07%. ETH's return ranked at the 61st percentile and BTC's at the 49th of 134 weeks of history.
What it does not show. A gain of 0.75% does not establish a turning point. BTC volume came in at 0.91 times its prior 12-week average, so the rise arrived on lighter activity, and ETH's worst day was Sunday 13 September at -5.51%, the day it set its high. The data does not say who was buying or whether the prior weeks' decline (-12.42% for BTC, -17.75% for ETH) has run its course.
What a careful desk would check. Realised volatility, the size of the swings that actually happened scaled to a yearly figure, was 45.5% for BTC and 92.6% for ETH. BTC sits 16.82% below its 52-week high and ETH 24.1% below its own. A desk would compare the light BTC volume with the ETH figure of 1.37 times before calling the move broad, and would ask whether the Sunday high held in later weeks.
Funding. BTC funding averaged 0.0100% per eight hours and never moved from that level, while ETH averaged 0.0089%, ranging from 0.0035% to 0.0100%. Positive funding means longs were paying shorts, but at these magnitudes the payment was small.
What would change this reading
- If a later week trades below BTC's low of 9,850.00, this week's gain reads as a pause rather than a turn.
- If BTC volume returns above its prior 12-week average while price holds above the open of 10,255.89, the light-volume reading weakens.
- If the ETH/BTC ratio keeps rising after a 3.07% weekly gain, the outperformance is a trend; if it reverses, the week was a single rotation.
Terms
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- ETH/BTC ratio
- the price of one Ether expressed in Bitcoin; rising means Ether is gaining against Bitcoin
- funding rate
- the periodic payment between long and short holders of a perpetual futures contract; positive means longs pay shorts