Week of 11 January 2021: Bitcoin falls 6.08% after four rising weeks while Ether falls less
After four straight weekly gains, what does a week in which both assets drop hard on Monday, recover, and end differently tell us about how a strong trend turns?
BTC fell from 38,150.02 to 35,828.61 (-6.08%) and ETH from 1,254.24 to 1,232.45 (-1.74%), a gap of 4.34 percentage points. Both set their weekly lows at 16:00 UTC on Monday 11 January, then recovered: BTC traded as low as 30,420 and ETH as low as 915. Volume ran 2.5 times the prior twelve-week average for BTC and 3.03 times for ETH.
What the data shows. The week's low came before its high for both assets. BTC dropped to 30,420 at 16:00 UTC on Monday 11 January and later reached 40,100 at 15:00 UTC on Thursday 14 January, a range of 31.82%. ETH fell to 915 in the same Monday hour and reached 1,298 at 16:00 UTC on Saturday 16 January, a range of 41.86%. Monday was the worst day for both (BTC -7.2%, ETH -13.33%), and the largest one-hour moves fell in early Monday hours (BTC -5.82% at 06:00 UTC, ETH -6.91% at 03:00 UTC). The four weeks before had all been positive for BTC (22.32%, 12.05%, 25.56% and 15.61%) and for ETH (8.02%, 7.37%, 42.79% and 28.2%). Realised volatility, the size of the swings actually recorded scaled to a yearly figure, reached 154.1% for BTC and 185.8% for ETH.
What it does not show. The candles record where price went, not what pushed it there or who was trading. The Monday low does not mark a turning point on its own; price simply stopped falling at that hour.
What a careful desk would check. A desk would note that BTC's weekly return ranked at the 16th percentile of 152 weeks of history, while ETH's ranked at the 37th. It would also weigh a 31.82% BTC range against its 6.08% weekly fall: the close sat at 55.9% of the week's range, so a small headline move hid a wide path.
Ether against Bitcoin. ETH fell less than BTC, so the ETH/BTC ratio rose 4.63% and ETH outperformed by 4.34 percentage points. Their hourly correlation was 0.91, so the two moved closely even as the gap between them opened.
What would change this reading
- If a later week trades below BTC's weekly low of 30,420, the Monday fall was a warning rather than a pause.
- If funding stays positive at 0.0529% per eight hours or higher while price falls further, long holders keep paying to hold a losing side.
- If the ETH/BTC ratio keeps rising past this week's 4.63% gain, the gap between the two assets has become a trend rather than one week's difference.
- If volume drops back towards 1 times the prior twelve-week average while price drifts, the 2.5 times reading was tied to this week's swings alone.
Terms
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- percentile
- the share of past weeks with a lower value; the 16th percentile means 16% of past weeks were lower
- funding
- a regular payment between long and short holders of a perpetual futures contract; positive means longs pay shorts