Week of 10 January 2022: BTC and ETH rise on below-average volume after three down weeks
When two assets rebound for a week on unusually thin trading volume, what does the price data support, and what should a careful desk wait to see before reading the rebound as durable?
BTC rose from 41,864.62 to 43,071.66 (+2.88%) and ETH from 3,151.97 to 3,346.88 (+6.18%). Both assets traded only 0.61 times their prior 12-week dollar volume. Both closed in the upper third of their weekly ranges after setting their lows on Monday.
What the data shows. Both assets set their lows early: BTC at 39,650 and ETH at 2,928.83, both in the hour starting 14:00 UTC on Monday 10 January. From there the week climbed, with BTC peaking at 44,500 on Thursday 13 January and ETH at 3,411.43 on Wednesday 12 January. The largest hourly move was modest for both: +2.33% for BTC and +2.72% for ETH, in the same hour starting 16:00 UTC on Tuesday 11 January. BTC's best day was 12 January (+2.75%), its worst 13 January (-3.06%); ETH's best was 11 January (+5.09%), its worst 13 January (-3.89%). The two moved closely hour by hour (correlation 0.92), and ETH outperformed by 3.3 percentage points, lifting the ETH/BTC ratio 3.21%. The return ranked at the 58th percentile of 204 weeks for BTC and the 67th for ETH.
What it does not show. Volume was the week's quiet signal: BTC dollar volume of 9.88 billion and ETH of 7.42 billion were both 0.61 times the prior twelve-week average. Thin volume can mean conviction is absent or that sellers have exhausted, and the data cannot distinguish these. It also cannot say who drove the rebound or whether it will hold. Both assets remain well below their 52-week highs: BTC by 37.24% and ETH by 30.95%.
What a careful desk would check. Realised volatility (the size of the actual swings, scaled to a yearly figure) was 50.4% for BTC and 62.1% for ETH. The prior four weeks were mostly down for both, with three declines each, including -11.47% for BTC and -17.66% for ETH in the most recent. A desk would test whether volume expands on the next advance, since a rise on 0.61-times volume carries less information than the same rise on heavy turnover.
Funding. Perpetual funding was nearly flat, averaging 0.0028% per eight hours for BTC and 0.0027% for ETH, with troughs of -0.0092% and -0.0198%. Neither side paid meaningfully to hold, so leverage did not appear to lean hard either way.
What would change this reading
- If later weeks see BTC trade back below its weekly low of 39,650, the rebound reads as a pause inside the prior downtrend rather than a turn.
- If dollar volume returns towards the prior twelve-week average while price holds above the close of 43,071.66 for BTC, the week reads as a bottoming process with broader participation.
- If ETH continues to outperform, the ETH/BTC ratio rise of 3.21% becomes a trend rather than a one-week divergence, which changes which hedges matter.
Terms
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- percentile
- the share of past weeks with a lower value; the 58th percentile means 58% of the 204 prior weeks were lower
- perpetual funding
- a regular payment between long and short holders of a perpetual futures contract; positive means longs pay shorts