Week of 31 January 2022: Bitcoin gains 11.88% and Ether 17.42% on below-average volume
Can a strong weekly gain be read as a turn when it arrives on below-average volume and a market still far below its high?
BTC rose from 37,881.75 to 42,380.87 (+11.88%) and ETH from 2,601.67 to 3,054.99 (+17.42%), with both closes in the upper third of their weekly ranges. Dollar volume was only 0.70 times (BTC) and 0.72 times (ETH) the prior twelve-week average. Both remained about 37-38% below their 52-week highs.
What the data shows. Both assets rose and closed near their highs. BTC fell to 36,250.00 at 12:00 UTC on Thursday 3 February, then reached 42,656.00 at 23:00 UTC on Sunday 6 February, a 17.67% range. ETH set its low at 2,476.07 early on Monday 31 January and its high at 3,074.56 in the same Sunday hour, a 24.17% range. Friday 4 February was the best day for both (BTC +11.42%, ETH +11.12%) and held BTC's largest hourly move, +4.05% starting 15:00 UTC. The close sat 95.7% of the way up BTC's weekly range and 96.7% of the way up ETH's. The week ranked at the 86th percentile for BTC and 92nd for ETH among 207 recorded weeks, but dollar volume came in below the prior twelve-week average for both.
What it does not show. The data records where price went, not why. Below-average volume does not identify who was buying or whether the buying was sustained. The prior four weeks were mixed for BTC (-11.47%, 2.88%, -15.85%, 4.52%), so this gain followed a choppy stretch rather than a clean downtrend or uptrend. Nothing here says the low at 36,250.00 was final.
What a careful desk would check. Realised volatility, the size of the swings that happened, was 61.5% a year for BTC and 78.5% for ETH. Both markets remained 38.25% and 36.97% below their 52-week highs. A large weekly gain on light volume is a weaker signal than the same gain on heavy volume, so a desk would watch whether later weeks hold above the weekly open of 37,881.75 and whether volume rises to confirm.
Funding and the ratio. BTC perpetual funding averaged 0.0026% per eight hours, ranging from -0.0086% to 0.01%; ETH averaged -0.0002%. Neither market showed persistent pressure from one side. ETH outperformed BTC by 5.54 percentage points, lifting the ETH/BTC ratio 4.96%, with an hourly correlation of 0.84.
What would change this reading
- If a later week closes back below the weekly open of 37,881.75, the gain reads as a rebound inside a decline rather than a turn.
- If volume rises above its prior twelve-week average while price holds these gains, the turn reading strengthens.
- If the ETH/BTC ratio gives back part of its 4.96% rise, this week's outperformance was temporary.
Terms
- percentile
- the share of past weeks with a lower value; the 86th percentile means 86% of past weeks were lower
- 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