Week of 16 November 2020: BTC up 15.4% and ETH 24.99%, both within 2.4% of 52-week highs
When both majors gain double digits in one week and close in the upper third of their weekly ranges, what does the data show about the strength of the move, and what does it leave unexplained?
BTC rose from 15,957.00 to 18,414.43 (+15.4%) and ETH from 448.07 to 560.03 (+24.99%), the 92nd and 97th percentile weeks of the 144 recorded. Both set their lows in the week's first hour and closed in the upper third of their ranges. Perpetual funding stayed positive all week for both.
What the data shows. Both assets set their weekly lows in the first hour of Monday 16 November — 15,864.00 for BTC and 445.45 for ETH — and rose from there. BTC reached 18,965.90 at 02:00 UTC on Saturday 21 November; ETH set its high of 580.88 later, at 22:00 UTC on Sunday 22 November. Both assets closed in the upper third of their weekly ranges — at 82.2% (BTC) and 84.6% (ETH) of the distance from the week's low to its high — so the week ended near its top rather than mid-range. Dollar volume ran 2.40 times the prior twelve-week average for BTC and 1.88 times for ETH. The four prior weeks were all up for BTC (13.26%, 5.62%, 12.45%, 3.11%); ETH's were mixed (7.34%, -2.26%, 14.53%, -1.37%). Both assets closed 2.37% (BTC) and 2.36% (ETH) below their 52-week highs.
What it does not show. Candles give direction and speed, not motive or participants. Nothing here says who was buying or whether the buying was leveraged. Hourly correlation was 0.75, close but not lockstep, so the two did not move identically hour by hour: the ETH/BTC ratio rose 8.31%, meaning ETH outperformed on a relative basis as well as in absolute terms.
What a careful desk would check. Realised volatility, the size of the swings that actually happened scaled to a yearly figure, was 68.9% for BTC and 85.4% for ETH. The largest hourly move was -4.06% and -4.74% respectively, both in the hour starting 05:00 UTC on Wednesday 18 November, inside an otherwise rising week. A desk would ask whether stops sized on calmer weeks would have been taken out in that single hour, and whether a 92nd- and 97th-percentile weekly gain changes the base rate used for the next week's risk.
Funding. BTC perpetual funding averaged 0.0322% per eight hours, with a maximum of 0.087%; ETH averaged 0.0388% with a maximum of 0.0898%. Positive funding means long positions paid short ones throughout the week, adding a running cost to any leveraged long held during it.
What would change this reading
- If the ETH/BTC ratio gives back part of the 8.31% weekly gain, this week reads as ETH-led rather than a shared move.
- If a later week closes below BTC's weekly low of 15,864.00 or ETH's of 445.45, the Monday lows stop functioning as support.
- If funding holds near its weekly maximums of 0.087% (BTC) and 0.0898% (ETH) while prices stop rising, longs are paying an increasing carry for a stalled position.
Terms
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- funding rate
- the periodic payment between long and short holders of a perpetual futures contract; positive means longs pay shorts
- ETH/BTC ratio
- the price of one Ether expressed in Bitcoin, showing which of the two is outperforming