Week of 9 August 2021: Bitcoin and Ether rise 7% and 10% on below-average volume
When a market posts one of its better weekly gains on lighter-than-usual trading volume, what does that combination tell us, and what remains unmeasurable?
BTC rose from 43,794.36 to 46,973.82 (+7.26%) and ETH from 3,011.84 to 3,307.09 (+9.80%), with both closing near the top of their weekly ranges. Both weekly gains ranked near the 75th percentile of the 182 weeks recorded. Trading volume stayed below the prior 12-week average for both assets (0.75x for BTC, 0.93x for ETH).
What the data shows. Both assets put in their low early on Monday 9 August (BTC 42,779, ETH 2,893.23) and their high in the same hour on Saturday 14 August at 09:00 UTC (BTC 48,144, ETH 3,330.98). The path rose rather than reversed, so the low came before the high. Friday 13 August was the best day for both (BTC +7.66%, ETH +9.07%); Thursday 12 August was the worst (BTC -2.44%, ETH -3.62%). BTC closed at 78.2% of its weekly range and ETH at 94.5%, both in the upper third. Realised volatility, the size of the swings that actually happened scaled to a yearly figure, was 59.3% for BTC and 79.6% for ETH. The two moved closely hour by hour (correlation 0.91), and the ETH/BTC ratio rose 2.37%, so Ether gained more than Bitcoin.
What it does not show. Volume of 17.08 billion dollars for BTC was 0.75 times its prior 12-week average, and ETH's 16.12 billion was 0.93 times. Lighter volume does not say who was trading or why. It also does not say whether the Saturday high held. The four prior weeks for BTC were mixed but mostly up (-7.24%, 11.34%, 12.62%, 9.90%), so this week continued an existing move rather than starting one. Nothing here identifies a cause.
What a careful desk would check. A 7.26% weekly gain ranked at the 76th percentile of 182 weeks, yet it came on lighter volume and after three rising weeks. A desk would ask whether later weeks sustain the price on heavier volume, and whether the largest hourly moves (BTC +2.6% on Monday 9 August, ETH +3.12% on Friday 13 August) would have breached its limits. Funding remained near flat, so leverage was not visibly strained.
Funding. BTC perpetual funding, a periodic payment between long and short holders of perpetual futures, sat at 0.01% per eight hours all week. ETH averaged 0.0211%, with a high of 0.0517% and a low of 0.01%, so longs paid modestly but without a spike.
What would change this reading
- If later weeks hold above this week's close of 46,973.82 on heavier volume, the light volume here reads as a pause in participation rather than a weak advance.
- If price falls back towards the Monday low of 42,779, the advance was not built on durable demand.
- If ETH/BTC keeps rising beyond this week's 2.37% gain, the relative strength has become a trend rather than a single week.
- If funding spikes far above ETH's 0.0517% high while price stalls, leverage on the long side is becoming crowded.
Terms
- close location
- where the closing price sits between the week's low and high; a higher percentage means the close sat nearer the high
- 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 that keeps its price close to the spot price