Week of 9 November 2020: Bitcoin rises 3.11% while Ether falls 1.37%
When Bitcoin and Ether move in opposite directions over a week, what does the gap between them tell us about the strength of the move, and what can weekly candles alone not settle?
BTC rose from 15,475.1 to 15,957 (+3.11%) while ETH fell from 454.29 to 448.08 (-1.37%), a gap of 4.48 percentage points. The ETH/BTC ratio dropped 4.35% and hourly correlation was 0.79. Both assets made their weekly low at 16:00 UTC on Monday 9 November.
What the data shows. The week split the two assets. BTC closed at 15,957, in the upper third of its 11.31% range, while ETH closed at 448.08, in the middle third of its 10.37% range. Both bottomed in the same hour, 16:00 UTC on Monday 9 November (BTC 14,805.54, ETH 433.09), and both peaked on Friday 13 November, though at different hours: BTC at 16,480 at 04:00 UTC, ETH at 478.01 at 22:00 UTC. BTC closed 2.9% below its 52-week high, ETH 7.18% below its own. Volume ran above the prior twelve-week average for both: 1.73 times for BTC (8.34 billion dollars) and 1.26 times for ETH (2.99 billion dollars). BTC's return sat at the 62nd percentile of 143 weeks of history, ETH's at the 41st.
What it does not show. Candles record prices, not causes. Nothing here explains why the two assets parted, or who was trading. Hourly correlation of 0.79 is close, but the weekly sign difference shows correlation can coexist with a clear relative move.
What a careful desk would check. The ETH/BTC ratio, the price of Ether in Bitcoin, fell 4.35%, so any structure that assumed the two moved together would have carried that gap. Realised volatility scaled to a year reached 51.0% for BTC and 58.8% for ETH, and ETH's largest hourly move was 2.9% versus BTC's 2.18%. A desk would test whether its sizing treats the two as one exposure.
Funding. Both funding averages stayed positive, meaning long holders paid short holders: 0.0097% per eight hours for BTC and 0.0255% for ETH, with ETH touching 0.0587%. The higher ETH rate came with the weaker price, a pairing worth watching but not proof of crowding.
What would change this reading
- If ETH continues to lag BTC in a later week and the ETH/BTC ratio falls further, this week reads as the start of a relative trend rather than one week of noise.
- If BTC trades below its weekly low of 14,805.54, the 2.9% distance to the 52-week high stops looking like a pause near the top.
- If ETH funding stays near 0.0255% while ETH falls against BTC, long holders keep paying for a losing relative position.
Terms
- ETH/BTC ratio
- the price of Ether expressed in Bitcoin, showing which asset held up better
- realised volatility
- how much the price actually swung over the week, expressed as a yearly percentage
- funding rate
- a regular payment between long and short holders of a perpetual futures contract; positive means longs pay shorts