Week of 20 December 2021: Bitcoin gains 8.77% on below-average volume
After three losing weeks, what does a strong weekly gain on weak volume actually establish about the market's direction?
BTC rose from 46,681.24 to 50,775.49 (+8.77%) and ETH from 3,924.14 to 4,063.56 (+3.55%), with both assets posting their low on Monday 20 December. Dollar volume was 10.28bn for BTC and 8.08bn for ETH, running below the prior 12-week average (0.57x for BTC, 0.62x for ETH). BTC closed 26.02% below its 52-week high.
What the data shows. Both assets bottomed early: BTC's low of 45,558.85 and ETH's low of 3,753.00 both came at 14:00 UTC on Monday 20 December, and both highs followed later in the week. BTC's best day was Thursday 23 December (+4.63%), the same day ETH gained 3.31%, and both assets set their weekly high late in the UTC day. BTC's close sat 83.5% of the way up its weekly range, ETH's 78.2%, so both finished in the upper third of their ranges. The largest hourly moves were small (BTC +2.10%, ETH +2.25%, both in the hour starting 03:00 UTC on Tuesday 21 December). Realised volatility, the size of the swings that actually happened scaled to a yearly figure, was 47.2% for BTC and 52.3% for ETH. BTC's +8.77% ranked at the 80th percentile of the 201 weeks of history recorded before it.
What it does not show. Dollar volume was 10.28bn for BTC and 8.08bn for ETH, or 0.57 times BTC's prior twelve-week average and 0.62 times ETH's, so the gain came on thinner trading than usual; the data cannot say who was absent or why. The four prior weeks were down for both assets in three of four, and this single week cannot establish that the direction has changed. Nothing here identifies what drove the buying.
What a careful desk would check. BTC closed 26.02% below its 52-week high and ETH 16.16% below, so this was a rebound inside a larger decline. The ETH/BTC ratio fell 4.80%, meaning BTC outperformed: a desk would ask whether that gap persists or reverses before treating the two markets as one trade.
What would change this reading
- If later weeks print volume above the prior twelve-week average while price holds near 50,775.49, the gain reads as a broadening move rather than a thin one.
- If BTC trades back below its weekly low of 45,558.85, the rebound reads as a pause inside the prior weeks' decline.
- If the ETH/BTC ratio keeps falling after a -4.80% week, the outperformance was relative, not two markets rising together.
Terms
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- close location
- where the weekly close sat between the week's low and high, as a percentage; high means closing near the top of the range
- percentile
- the share of past weeks with a lower value; the 80th percentile means 80% of past weeks were lower