Week of 1 March 2021: Bitcoin adds 12.93% and Ether 21.67%, closing near the top of the range
When both assets rally for a week and close near their highs while longs pay funding, what can the price data establish about the move, and what must remain open?
BTC rose from 45,134.11 to 50,971.75 (+12.93%) and ETH from 1,418.67 to 1,726.16 (+21.67%). Both lows came in the week's first hour and both assets closed in the upper third of their ranges. BTC funding averaged 0.0124% per eight hours and stayed positive all week.
What the data shows. Both markets put in their lows at 00:00 UTC on Monday 1 March — BTC at 44,950.53 and ETH at 1,409.91 — and traded higher from there. BTC reached its weekly high of 52,640 on Wednesday 3 March at 13:00 UTC, then drifted; ETH set its high of 1,734.16 in the final hour of the week, on Sunday 7 March at 23:00 UTC. BTC's return ranked at the 86th percentile of the 159 weeks of history recorded, ETH's at the 94th. The ETH/BTC ratio rose 7.74%, so this was a shared move in the same direction (hourly correlation 0.84) with Ether ahead. BTC dollar volume of 24.01 billion was about equal to its prior twelve-week average; ETH's 10.8 billion was below its own.
What it does not show. Rising prices on roughly normal volume do not identify who was buying or whether the buying was new money rather than short positions closing. The data carries no open-interest or order-book figures, so the size of any positioning cannot be measured here. Nor does a Sunday close at the top of the range indicate what follows; the ETH high arriving in the week's last hour is a fact about this week's tape only.
What a careful desk would check. Both markets fell the week before (BTC -21.38%, ETH -26.6%), so this week retraces part of that loss rather than extending a fresh trend: BTC closed 12.4% below its 52-week high and ETH 14.92% below. Realised volatility — the size of the swings that actually happened, scaled to a yearly figure — was 80.4% for BTC and 104.1% for ETH. The largest hourly move for both was a drop, -3.19% and -3.92% respectively, in the hour starting 00:00 UTC on Friday 5 March. A desk would ask whether stops set above the week's range would have survived that hour.
Funding. BTC perpetual funding averaged 0.0124% per eight hours and never went below 0.01%; ETH averaged 0.0356% with a high of 0.0871%. Positive funding means holders of long positions were paying holders of short ones. ETH longs paid roughly three times what BTC longs paid, a cost that accumulates for anyone holding through such a week.
What would change this reading
- If a later week trades below BTC's weekly low of 44,950.53, this week's gain reads as a rebound inside a wider decline rather than a resumption of one.
- If ETH funding stays near 0.0356% per eight hours while the ratio stops rising, the premium paid for being long ETH loses its accompaniment in relative price.
- If a later week's volume for BTC rises well above the 24.01 billion recorded here, the modest participation behind this rally would be revised.
- If the ratio's 7.74% gain reverses, the leadership shown by ETH this week has not persisted and the pair returns to its prior relationship.
Terms
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- ETH/BTC ratio
- the price of one Ether measured in Bitcoin, which shows which of the two is gaining relative to the other
- perpetual funding
- a regular payment between long and short holders of a perpetual futures contract; positive rates mean longs pay shorts