Week of 11 April 2022: Both assets fall about 6% as most of the loss arrives on Monday
When a week's decline is concentrated in its first day and volume runs below the recent average, how should a desk read the rest of the week's price action?
BTC fell from 42,158.85 to 39,678.12 (-5.88%) and ETH from 3,203.04 to 2,988.06 (-6.71%). Monday 11 April alone took 6.23% off BTC and 6.97% off ETH, more than the final weekly declines, so later days recovered part of that drop. Dollar volume was 0.79 times the prior 12-week average for BTC and 0.86 for ETH.
What the data shows. Both assets set their weekly highs at 01:00 UTC on Monday 11 April (BTC 42,414.71, ETH 3,213.63) and their lows late that same day (BTC 39,200 at 22:00, ETH 2,950 at 21:00). Monday's daily losses of -6.23% for BTC and -6.97% for ETH exceed the final weekly declines of -5.88% and -6.71%, so the following six days recovered a small share of the opening drop. Wednesday 13 April was the best day (BTC +2.68%, ETH +2.99%) and also carried BTC's largest hourly move, +2.07% starting 13:00 UTC; ETH's largest hourly move was -2.54% in Monday's 09:00 hour. Both closes sat in the lower third of their weekly ranges. Dollar volume was 0.79 times BTC's and 0.86 times ETH's prior twelve-week averages. The two assets moved closely hour by hour (correlation 0.90), and the ETH/BTC ratio changed only -0.88%.
What it does not show. The candles say where price went, not why. Low volume alongside a sharp fall can mean conviction was thin or that few sellers were needed to move price; the data cannot distinguish these. Funding rates near zero (BTC averaging 0.0014% per eight hours, ETH -0.0024%) show no persistent cost imbalance between longs and shorts, but reveal nothing about position sizes or who was trading.
What a careful desk would check. Realised volatility was 45.6% annualised for BTC and 51.2% for ETH. The return ranked at the 21st and 22nd percentiles of 217 prior weeks, and BTC sat 42.19% below its 52-week high. With volume light relative to the prior twelve weeks, a desk would ask whether the Monday low held on genuine displacement or on absence of bids, and test whether its exits would have filled during the 09:00 to 22:00 UTC stretch on Monday.
What would change this reading
- If a later week trades below BTC's Monday low of 39,200 or ETH's 2,950, the week reads as the start of a further leg rather than a one-day shock.
- If volume returns above its prior twelve-week average while price holds above the weekly lows, the light-volume decline loses weight as a trend signal.
- If funding moves meaningfully negative for BTC from its 0.0014% average, short positioning is becoming costly to hold and worth separating from price direction.
Terms
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- ETH/BTC ratio
- the price of one Ether measured in Bitcoin, showing which asset moved more
- funding rate
- the periodic payment between long and short holders of a perpetual futures contract; positive means longs pay shorts