Week of 26 April 2021: Ether gains 27% and beats Bitcoin by 11.8 points
When two assets rise together but one gains 11.8 points more, what do that gap, the split in trading volume against each asset's own average, and a loose correlation tell a researcher about the move?
BTC rose from 49,066.76 to 56,578.21 (+15.31%) and ETH from 2,320.44 to 2,949.56 (+27.11%), a gap of 11.8 points. Both set their lows in the first hour of Monday 26 April. ETH closed 0.78% below its 52-week high; BTC 12.39% below.
What the data shows. Both assets set their weekly lows at 00:00 UTC on Monday 26 April — BTC at 48,753.44, ETH at 2,303.64. BTC reached 58,458.07 at 02:00 UTC on Saturday 1 May, a range of 19.91% from low to high. ETH reached 2,985.00 at 21:00 UTC on Sunday 2 May, a range of 29.58%. The largest hourly moves were modest beside the weekly gains: +2.44% for BTC (30 April, 13:00 UTC) and +3.17% for ETH (27 April, 14:00 UTC). Realised volatility, the size of the actual price swings scaled to a yearly figure, was 60.0% for BTC and 77.5% for ETH. ETH's weakest day still closed +0.16% (2 May), so no day of the week lost ground. BTC's weekly return ranked at the 88th percentile of the 167 weeks on record, ETH's at the 96th.
What it does not show. Hourly correlation was 0.64, which the data labels loose (below 0.7), but it supplies no baseline for what counts as usual for the pair. It also cannot say who was buying, or whether the buying was leveraged. BTC's dollar volume of 21.72 billion was 0.80 times its prior twelve-week average, while ETH's 15.27 billion was 1.25 times its average; volume figures do not distinguish new demand from positions closing.
What a careful desk would check. Funding stayed positive all week — averaging 0.0148% per eight hours for BTC (high 0.0453%) and 0.0187% for ETH (high 0.0512%) — so long positions were paying short ones throughout the rise. A desk would ask how much of a 15.31% and 27.11% gain rests on paid-for leverage, and whether its own stops would have survived the 2.44% and 3.17% hours.
Ether against Bitcoin. The ETH/BTC ratio rose 10.24%. ETH also came off four straight up weeks (23.03%, 3.65%, 3.91%, 3.79%), while BTC's prior four were mixed (4.35%, 3.09%, -6.41%, -12.61%), so this week extended an existing divergence rather than starting one.
What would change this reading
- If ETH trades back towards its weekly open of 2,320.44 while BTC holds near 56,578.21, the 11.8-point gap reads as a temporary stretch rather than a lasting shift.
- If BTC dollar volume rises back above its prior twelve-week average in later weeks, the thin participation behind this week's 15.31% gain would be answered.
- If funding stays at or above 0.0148% (BTC) and 0.0187% (ETH) while prices stop rising, longs keep paying for a position that is no longer gaining.
- If hourly correlation moves back above 0.64, the two assets are converging again and the case for reading this week as rotation weakens.
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 96th percentile means 96% of the 167 recorded weeks were lower
- funding rate
- the periodic payment between long and short holders of a perpetual futures contract; positive means longs pay shorts