Week of 2 May 2022: Bitcoin falls 11.5% as the decline stretches to a fifth week
When a market has already fallen for four straight weeks, what does a further double-digit weekly loss say about the trend, and what can the shape of the week not tell us?
BTC fell from 38,468.35 to 34,038.40 (-11.52%) and ETH from 2,824.81 to 2,519.71 (-10.80%). Both weekly lows arrived at 17:00 UTC on Sunday 8 May, after the highs. This was the fifth consecutive down week for both assets, and volume ran 1.18 times (BTC) and 1.15 times (ETH) the prior twelve-week average.
What the data shows. The week turned after midweek strength. BTC's high of 40,023.77 and ETH's high of 2,965.85 both came at 19:00 UTC on Wednesday 4 May, the best day for both (BTC +5.20%, ETH +5.71%). The next day reversed it: Thursday 5 May was the worst day (BTC -7.90%, ETH -6.55%) and held the largest hourly move, -3.40% for BTC and -3.09% for ETH in the hour starting 15:00 UTC. From there the market ground down into the close, finishing at 5.1% of the weekly range for BTC and 7.4% for ETH, both in the lower third. The two assets tracked each other hour by hour (correlation 0.90), and the ETH/BTC ratio moved only 0.81%, so this was a shared move. BTC traded 50.41% below its 52-week high and the weekly return ranked at the 10th percentile of the 220 weeks on record.
What it does not show. The candles record the path, not the reason. Nothing here identifies who was selling or whether selling was forced. The Sunday low came near the week's end, so the data cannot say whether it marked an end or a pause.
What a careful desk would check. Five straight down weeks is a trend, not a single shock. Realised volatility, the size of the swings that actually happened scaled to a yearly figure, was 54.3% for BTC and 61.5% for ETH. The largest single hourly move was -3.40%, so the weekly loss did not come from one violent hour; it accumulated across days and weeks. A desk would compare its exposure with the prior four weeks (-9.15%, -5.88%, -0.57%, -2.49%) rather than with a flat baseline.
Funding. BTC funding averaged 0.0055% per eight hours, near flat, with a minimum of -0.0135%. ETH averaged 0.0059%. Longs paid shorts only marginally, so leverage does not appear to have been the engine of the fall.
What would change this reading
- If a later week closes below this week's low of 33,713.95 for BTC, the Sunday trough reads as a pause rather than a floor.
- If the two assets separate, with the ETH/BTC ratio moving well beyond its 0.81% weekly change, the shared move has become a relative one.
- If volume falls back towards its prior twelve-week average while price keeps sliding, participation in the decline is thinning.
- If funding turns clearly negative while price falls, short positions are paying to hold, which changes the cost profile of the trend.
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 10th percentile means only 10% of past weeks fell further
- perpetual funding
- a regular payment between long and short holders of a perpetual futures contract that keeps its price close to the spot price