Week of 2 August 2021: Ether gains 17.86% and Bitcoin 9.9%, both far below 52-week highs
When two closely traded assets rise sharply in the same week but one clearly leads, what does the price and volume record establish, and what does it leave unexplained?
BTC rose from 39,850.27 to 43,794.37 (+9.9%) and ETH from 2,555.50 to 3,011.85 (+17.86%), with both lows ahead of their highs. ETH led by 7.96 percentage points and the ETH/BTC ratio gained 7.24%. BTC volume was 0.79 times its prior 12-week average, while both assets stayed about 30% below their 52-week highs.
What the data shows. BTC's low of 37,332.70 came at 12:00 UTC on Thursday 5 August and its high of 45,310.00 at 06:00 UTC on Sunday 8 August, a range of 21.37%. ETH printed its low of 2,442.32 at 07:00 UTC on Tuesday 3 August and its high of 3,189.99 at 00:00 UTC on Sunday, a range of 30.61%. Best days were Friday 6 August for BTC (+4.83%) and Saturday 7 August for ETH (+9.30%); ETH's worst day was the last one, -4.70% on Sunday. The weekly returns ranked at the 82nd percentile for BTC and the 92nd for ETH out of 181 weeks. BTC traded 18.98 billion dollars, 0.79 times its prior twelve-week average; ETH traded 18.92 billion, 0.99 times.
What it does not show. The record does not say why either asset rose or who was buying. At the close BTC was 32.18% below its 52-week high and ETH 30.49% below, so a strong week sits inside a still-depressed market. The lighter-than-usual BTC volume indicates fewer dollars changed hands than in a typical recent week, but it does not measure conviction.
What a careful desk would check. Realised volatility, the size of the swings that actually happened scaled to a yearly figure, was 70.4% for BTC and 92.0% for ETH. Both closed in the upper third of their weekly ranges (81.0% and 76.2% of the span), which a desk reads as a strong close rather than a strong week. BTC perpetual funding averaged 0.0096% per eight hours (range 0.0013% to 0.0100%), so longs paid shorts, mildly and steadily.
Ether against Bitcoin. The pair moved together but not in lockstep: hourly correlation was 0.79, described as close, and the ETH/BTC ratio rose 7.24%. The prior four weeks for each were split two down and two up, so this week extends a two-week rise rather than reversing a slide.
What would change this reading
- If a later week closes BTC below its weekly open of 39,850.27, this gain reads as a bounce inside the decline from the 52-week high rather than the start of a new trend.
- If BTC dollar volume stays near 0.79 times its prior twelve-week average while prices rise further, the move continues to occur on light participation.
- If funding holds near 0.0096% per eight hours while prices stall, longs keep paying for a position that is no longer advancing.
- If hourly correlation drops well below 0.79 while the ETH/BTC ratio keeps rising, the two markets are separating and a BTC-only hedge no longer covers ETH risk.
Terms
- ETH/BTC ratio
- the price of one Ether expressed in Bitcoin; it rises when Ether outperforms Bitcoin
- 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; a positive rate means longs pay shorts