Week of 9 May 2022: fifth straight losing week, Bitcoin falls 7.96% and Ether 14.86%
After five straight weeks of losses and a 28.25% intraweek swing in Bitcoin, what does the shape of this week's decline tell us about how the market is being sold, and what does it leave unanswered?
BTC fell from 34,038.39 to 31,328.89 (-7.96%) and ETH from 2,519.71 to 2,145.29 (-14.86%), a fifth straight losing week for both. The lows, 26,700 and 1,800, came in the same hour on Thursday 12 May. Volume ran about 2.2 times the prior twelve-week average.
What the data shows. The week opened close to its top: BTC's high of 34,243.15 and ETH's 2,530.78 both came at 01:00 UTC on Monday 9 May, and the opening price sat 0.6% below the week's high for BTC and 0.44% for ETH. Monday was also the worst day (BTC -11.64%, ETH -11.56%). Both assets bottomed in the same hour, 05:00 UTC on Thursday 12 May, at 26,700 and 1,800, giving ranges of 28.25% and 40.6% from low to high. The largest single hourly move came at 12:00 UTC on Wednesday 11 May: -6.99% for BTC and -9.76% for ETH. Both closed in the middle third of their weekly range (BTC 61.4%, ETH 47.2% of the way up). Dollar volume was 2.18 times the prior twelve-week average for BTC ($29.3bn) and 2.15 times for ETH ($21.0bn). Ether lost 6.9 percentage points more than Bitcoin, and the ETH/BTC ratio fell 7.5%.
What it does not show. The candles record price, not cause. Nothing here identifies who was selling or whether the selling was forced. The rebounds came on different days: BTC's best day was Sunday 15 May at 4.13%, ETH's was Tuesday 10 May at 5.07%, and this data cannot say what produced either. A close in the middle third of the range says where the week ended, not whether the Thursday low was final.
What a careful desk would check. Realised volatility, the swings that actually happened scaled to a yearly figure, reached 140.2% for BTC and 175.9% for ETH. A -6.99% hourly move is the size a stop distance or margin buffer would have had to survive. Both assets were already 54.35% and 55.74% below their 52-week highs, and this week's return ranked at the 18th percentile for BTC and the 10th for ETH across 221 weeks of history. The four prior weeks were all down for both assets (BTC: -5.88%, -0.57%, -2.49%, -11.52%), so this is the fifth.
Funding. BTC perpetual funding averaged 0.0024% per eight hours, between -0.042% and 0.01%. ETH averaged -0.0014%, with a low of -0.0797%. A negative average means short holders were paying long holders over the week; here those payments are small beside the price moves.
What would change this reading
- If a later week closes below this week's low of 26,700 for BTC or 1,800 for ETH, the Thursday low reads as a pause rather than a floor.
- If ETH keeps falling faster than BTC, as the -7.5% change in the ETH/BTC ratio this week suggests, the pair becomes the hedge worth watching.
- If funding stays near BTC's weekly average of 0.0024% per eight hours while price falls, the selling looks less like long positions being closed out.
- If hourly moves larger than -6.99% appear next week, limits calibrated on BTC realised volatility of 140.2% look too loose.
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 18th percentile means 18% of past weeks were lower
- perpetual funding
- a regular payment between long and short holders of a perpetual futures contract, a product with no expiry date that tracks the spot price