Week of 18 October 2021: Bitcoin slips 1.1% while Ether gains 6.12% in the same week
When Bitcoin and Ether move in opposite directions over one week, what does the size and shape of the divergence tell a careful reader, and what does it leave unexplained?
BTC fell from 61,528.32 to 60,852.22 (-1.10%) while ETH rose from 3,847.00 to 4,082.33 (+6.12%), a 7.22 percentage point gap. The ETH/BTC ratio gained 7.30%. BTC set its weekly high on Wednesday 20 October and its low on Sunday 24 October, closing in the lower third of its range.
What the data shows. The two assets did not share a direction. BTC peaked at 67,000.00 at 14:00 UTC on Wednesday 20 October, in the middle of the UTC day, and then declined to a low of 59,510.63 at 16:00 UTC on Sunday 24 October — high before low, and a weekly range of 12.58%. Its worst day, 21 October, took 5.77% off, and the close sat in the lower third of the week range (17.9%). ETH took the opposite path: its low of 3,676.00 came first, at 13:00 UTC on Monday 18 October, and its high of 4,375.00 followed on Thursday 21 October. ETH's best day, 20 October, added 7.33%. Hourly correlation between the two was 0.78, a close reading on the -1 to 1 scale, so the assets still moved together hour to hour even as their weekly returns split. BTC dollar volume was 1.19 times its prior twelve-week average; ETH volume was 0.96 times its own average, so the ETH move came on ordinary activity.
What it does not show. Price data records the divergence, not its cause. Nothing here identifies which flows drove ETH higher or BTC lower, or whether either side was a persistent position. A weekly return of -1.10% for BTC sits at the 34th percentile of the 192 weeks recorded, and ETH's +6.12% at the 65th — both within ordinary historical spread, so the gap matters more than either leg alone.
What a careful desk would check. ETH realised volatility, the size of the swings actually traded scaled to a yearly figure, reached 65.8% against BTC's 58.0%, and ETH's range was 19.02% versus BTC's 12.58%. BTC closed 9.01% below its 52-week high, ETH 5.78% below. A desk would read BTC's lower-third close alongside three up weeks before this one (+11.68%, 13.40%, 12.57%) and ask whether the pattern is rotation out of one asset or simply two separate trends.
Funding. BTC perpetual funding — the periodic payment between long and short holders of a futures contract with no expiry — averaged 0.0299% per eight hours, with a maximum of 0.0689% and a minimum of 0.0100%, never negative. ETH funding averaged 0.0358%, peaking at 0.0804%. Both averages were positive, so long positions were paying short ones on both contracts throughout the week, including a week in which BTC's price weakened. The data gives no information about the size or distribution of those positions.
What would change this reading
- If BTC closes a later week back above its weekly high of 67,000.00, this week's decline reads as a pause inside the prior three up weeks rather than a turn.
- If the ETH/BTC ratio keeps rising after a 7.30% weekly gain, the divergence was a shift in relative demand rather than a one-week rotation.
- If BTC funding stays positive near 0.0299% while price falls towards its low of 59,510.63, longs are paying to hold positions against a weakening tape.
- If hourly correlation rises further above the 0.78 seen here, the separation observed this week did not persist.
Terms
- close location
- where the weekly close fell within the week's high-low range, as a percentage from the low
- ETH/BTC ratio
- the price of Ether measured in Bitcoin, showing 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 that keeps its price close to the spot price