Week of 19 October 2020: Bitcoin gains 13.26% to within 2.13% of its 52-week high
When Bitcoin closes 2.13% below its 52-week high after a 13.26% weekly gain, what do volume, funding and the lag in Ether say about the strength behind the move?
BTC rose from 11,503.14 to 13,028.83 (+13.26%), closing 2.13% below its 52-week high; ETH gained 7.34% to 405.86 but lagged by 5.92 percentage points. BTC volume was 1.18 times its prior 12-week average, ETH's only 0.81 times. Both funding rates stayed positive all week.
What the data shows. BTC rose from 11,503.14 to 13,028.83 (+13.26%), a range of 17.02% from the weekly low of 11,407.96 (03:00 UTC, Monday 19 October) to the high of 13,350.00 (03:00 UTC, Sunday 25 October). The low came before the high. The close sat at 83.5% of that range, in the upper third. The best day was Wednesday 21 October (+7.31%), yet the week's largest hourly move was -3.16% in the hour starting 23:00 UTC that same evening — a sharp reversal inside the strongest day. ETH gained 7.34% (378.12 to 405.86), peaking at 420.73 at 22:00 UTC on Thursday 22 October. The two assets moved closely but not identically (hourly correlation 0.78), and ETH lagged by 5.92 percentage points, so the ETH/BTC ratio fell 5.23%. BTC dollar volume reached 5.26 billion, 1.18 times its prior twelve-week average; ETH's 2.01 billion was 0.81 times.
What it does not show. The candles record the path, not the reason. Nothing here identifies who bought, whether the buying was leveraged, or what followed the Sunday high. The -3.16% hour does not distinguish profit-taking from forced selling. ETH's rise on below-average volume cannot be read as either confirmation or absence of demand.
What a careful desk would check. This was BTC's 90th-percentile week out of 140 recorded, after four mixed weeks (-1.34%, -1.00%, 6.59%, 1.18%), none of which moved as much as this week's 13.26%. Realised volatility, the size of the actual swings scaled to a yearly figure, was 52.9% for BTC and 57.1% for ETH. A desk would test whether stops sized on the prior four weeks' returns — none larger than 6.59% — would have survived the -3.16% hour, and would note that ETH rose less than BTC on lighter volume relative to its own average — a divergence to weigh against the shared direction.
Funding. BTC perpetual funding averaged 0.0092% per eight hours and never turned negative (0.0023% to 0.0100%). ETH funding averaged 0.0329%, with a high of 0.0836%. Positive rates mean long positions were paying short ones, a running cost for leveraged longs that was several times larger in ETH than in BTC.
What would change this reading
- If BTC trades back below this week's low of 11,407.96, the push to within 2.13% of the 52-week high reads as a test that failed rather than a new trend.
- If ETH continues to lag by margins near 5.92 percentage points, the ETH/BTC ratio decline of 5.23% becomes a trend rather than a one-week gap.
- If ETH funding stays near 0.0329% per eight hours while volume stays below 0.81 times its average, longs pay more to hold a rising but thinly traded market.
Terms
- percentile
- the share of past weeks with a lower value; the 90th percentile means 90% of the 140 recorded weeks were weaker
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- perpetual funding
- a regular payment between long and short holders of a perpetual futures contract; positive means longs pay shorts