Week of 19 July 2021: Bitcoin rises 11.34% and Ether 15.76%, closing at the week's top
When a market posts one of its strongest weekly gains in over three years of recorded history, but on below-average volume and negative funding, what has actually been proven?
BTC rose from 31,778.57 to 35,381.02 (+11.34%) and ETH from 1,891.65 to 2,189.79 (+15.76%), both bottoming on Tuesday 20 July. Both closed within 2% of their weekly highs. Volume ran at 0.48x (BTC) and 0.49x (ETH) the prior twelve-week average, and funding stayed negative on average.
What the data shows. Both assets bottomed on Tuesday 20 July and finished at the top of the week. BTC's low of 29,278.00 came at 10:00 UTC on Tuesday 20 July; ETH's low of 1,706.00 came at 03:00 UTC the same day. Wednesday 21 July was the best day for both (BTC +7.90%, ETH +11.73%) and carried the largest hourly move, +2.81% and +3.32% in the hour starting 04:00 UTC. BTC closed at 35,381.02, near its high of 35,398.00 set at 23:00 UTC on Sunday (close location 99.7%); ETH's was 98.0%. The two moved together (hourly correlation 0.88), but ETH gained more, lifting the ETH/BTC ratio 3.97%. The weekly returns ranked at the 84th and 89th percentiles of the 179 weeks on record.
What it does not show. Trading was light. BTC dollar volume of 12.28 billion was 0.48 times the prior twelve-week average; ETH's 10.04 billion was 0.49 times. A strong gain on thin volume cannot say whether participation was broad or a few large trades moved the price. The data names no cause, no buyers, and no open interest. The prior four weeks were mostly down for both (BTC -2.53%, 1.68%, -2.92%, -7.24%), and nothing here establishes that the Tuesday lows were final.
What a careful desk would check. BTC stayed 45.21% below its 52-week high and ETH 49.46% below, so this is a rebound inside a larger decline. Realised volatility, the size of the swings that actually happened scaled to a yearly figure, was 56.1% for BTC and 77.6% for ETH, with low-to-high ranges of 20.90% and 28.93%. A desk would ask whether later weeks hold above 29,278.00 and 1,706.00, and whether volume returns towards its prior average; a move formed in a thin market can unwind as cheaply as it formed.
Funding. BTC perpetual funding averaged -0.0125% per eight hours (low -0.0391%, high 0.0032%); ETH averaged -0.0006% (low -0.0416%, high 0.01%). Short positions paid long ones on average while price rose, so the gain did not arrive with longs paying a premium to stay in.
What would change this reading
- If BTC trades back below its Tuesday low of 29,278.00, the week reads as a bounce inside a decline rather than a turn.
- If volume returns towards its prior twelve-week average while price holds near 35,381.02, the gain gains the participation it lacked here.
- If funding turns positive while price rises, longs would begin paying shorts, changing the cost of holding the crowded side.
Terms
- close location
- where the closing price sits within the week's low-to-high range; 99.7% means the close was almost at the top
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- perpetual funding
- a regular payment between long and short holders of a perpetual futures contract; negative means shorts pay longs