Week of 23 May 2022: a fifth straight down week as Ether falls 11.23% against Bitcoin's 2.73%
When both assets close lower for a fifth consecutive week but Ether falls four times as far as Bitcoin, what does that gap say about a market already far below its high?
BTC fell from 30,293.93 to 29,468.10 (-2.73%) and ETH from 2,043.19 to 1,813.64 (-11.23%). The ETH/BTC ratio dropped 8.75%. Both assets closed lower for a fifth consecutive week, and both traded on volume below their prior 12-week average.
What the data shows. BTC's high of 30,670.51 came early on Monday 23 May, and its low of 28,019.56 did not arrive until Thursday 26 May at 13:00 UTC. ETH followed the same pattern, high on Monday 23 May at 2,088.50, low on Friday 27 May at 23:00 UTC at 1,703.00 — after BTC had already made its low. Ether's range was 22.64% against Bitcoin's 9.46%, and its worst single day (26 May, -7.74%) was twice Bitcoin's worst (23 May, -3.91%). BTC closed at 54.6% of its weekly range, in the middle third; ETH closed at 28.7%, in the lower third. The hourly correlation between the two was 0.90, very close, yet the ETH/BTC ratio still fell 8.75%: they moved together in direction but not in size. Trading activity was light for both — BTC dollar volume of 12.61 billion was 0.86 times its prior twelve-week average, ETH 0.92 times.
What it does not show. The candles do not say why Ether kept falling after Bitcoin's Thursday low, and they do not identify who was selling. Volume below the prior average tells us activity was not elevated; it does not tell us whether the selling was thin or one-sided. At the close BTC was 57.06% below its 52-week high and ETH 62.58% below, but nothing in this data says where either goes next.
What a careful desk would check. This was the fifth consecutive down week for both assets, after prior weekly returns of -2.49%, -11.52%, -7.96% and -3.30% for BTC and -3.29%, -10.80%, -14.86% and -4.76% for ETH. This week's BTC return ranked at the 28th percentile of the 223 weeks recorded, ETH's at the 13th — a weak week, but not an extreme one by the market's own history. Realised volatility, the size of the swings that actually happened scaled to a yearly figure, was 51.8% for BTC and 79.6% for ETH. A desk would test whether the ETH/BTC gap was an unwinding of a crowded side or the start of a longer divergence, and would size positions against ETH's 79.6% rather than BTC's 51.8%.
Funding. BTC perpetual funding averaged 0.0072% per eight hours and ETH 0.0037%, both barely positive, with minimums of -0.0124% and -0.0143%. Longs paid shorts a small amount on average while price fell, which points to mild rather than extreme positioning.
What would change this reading
- If ETH continues to fall faster than BTC in later weeks, the 8.75% ratio drop marks the start of a divergence rather than a one-week gap.
- If either asset trades below this week's low — 28,019.56 for BTC, 1,703.00 for ETH — a sixth consecutive down week would extend the sequence the data already shows.
- If volume rises above the prior twelve-week average while price stabilises, the light activity here reads as absence of buyers rather than absence of sellers.
- If funding turns clearly negative while price holds, the mild long-paying tilt visible this week has reversed.
Terms
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- ETH/BTC ratio
- the price of Ether divided by the price of Bitcoin; it falls when Ether underperforms Bitcoin
- percentile
- the share of past weeks with a lower value; the 13th percentile means most of the 223 recorded weeks were stronger