Week of 26 October 2020: Bitcoin rises 5.62% while Ether falls 2.26% in the same week
When Bitcoin and Ether move in opposite directions over one week, how wide is the gap, what does it say about where strength was concentrated, and what can price data alone not explain?
BTC rose from 13,029.64 to 13,761.50 (+5.62%), closing 1.28% below its 52-week high. ETH fell from 405.85 to 396.67 (-2.26%), leaving it 17.83% below its 52-week high. The ETH/BTC ratio dropped 7.46%, so the week's strength was concentrated in BTC.
What the data shows. BTC set its low of 12,765.00 at 17:00 UTC on Monday 26 October and its high of 14,100.00 at 10:00 UTC on Saturday 31 October, a range of 10.46% with the low coming first. The best day was Tuesday 27 October (BTC +4.47%, ETH +2.78%), the worst Wednesday 28 October (BTC -2.71%, ETH -3.76%). BTC volume was 1.52 times its prior twelve-week average; ETH volume was 0.79 times. BTC's return ranked at the 74th percentile of the 141 weeks on record, ETH's at the 36th. Hourly correlation between the two was 0.77, close but well short of moving together, and the ETH/BTC ratio fell 7.46%.
What it does not show. The data records prices and volumes, not causes. It does not say whether ETH weakness came from selling of ETH specifically, or rotation between the two, and it identifies no participants. The BTC high arriving near the end of the week does not establish that the rise continued.
What a careful desk would check. A BTC position closed 1.28% below its 52-week high and an ETH position 17.83% below its own is a split market, not a common one. A desk would check whether its hedges assumed the pair still moved together; a 0.77 hourly correlation is high enough for a hedge to mostly work and low enough to leave a gap. The largest hourly move was small in both (BTC -1.79%, ETH -2.37%), so realised volatility of roughly 50% annualised sits well below the swing extremes.
Funding. BTC perpetual funding averaged -0.0017% per eight hours, near flat, so holders of short positions were paying holders of long positions on average. ETH funding was positive all week, averaging 0.0112% with a minimum of 0.01%, so longs paid shorts even as ETH's price fell.
What would change this reading
- If BTC later trades below its weekly low of 12,765.00, the rise reads as a failed push rather than a continuing trend.
- If the ETH/BTC ratio stops falling after its 7.46% drop, the divergence was a one-week event rather than a rotation.
- If ETH funding stays near 0.0112% while price sits below 396.67, longs keep paying to hold a falling asset.
Terms
- ETH/BTC ratio
- the price of one Ether expressed in Bitcoin; a falling ratio means Ether is losing ground against Bitcoin
- percentile
- the share of past weeks with a lower return; the 74th percentile means 74% of the 141 recorded weeks were lower
- perpetual funding
- a regular payment between long and short holders of a perpetual futures contract; positive means longs pay shorts