Week of 29 August 2022: Ether gains 10.69% while Bitcoin adds 2.27%
When Ether outperforms Bitcoin by more than eight percentage points in one week, what does the price and funding data reveal about the move, and what does it leave unexplained?
ETH rose 10.69% (1,426.76 to 1,579.28) while BTC gained 2.27% (19,555.61 to 20,000.30), a gap of 8.42 percentage points. The ETH/BTC ratio rose 8.23%. Both assets remain far below their 52-week highs, BTC by 70.86% and ETH by 67.42%.
What the data shows. Both assets posted their best day on Monday 29 August (BTC +3.73%, ETH +8.76%) and their worst on Tuesday 30 August (BTC -2.34%, ETH -1.75%). ETH set its weekly low of 1,422.08 in Monday's opening hour and its high of 1,650.00 on Friday 2 September at 14:00 UTC. BTC's high of 20,576.25 came earlier, on Tuesday at 07:00 UTC. Realised volatility — the size of the swings that actually happened, scaled to a yearly figure — was 42.7% for BTC and 75.0% for ETH. BTC dollar volume was 1.32 times its prior twelve-week average; ETH volume was lighter at 0.68 times.
What it does not show. Prices record the size and speed of the move, not its cause. Nothing here identifies who was buying Ether or whether the outperformance reflects a durable shift in demand. The two prior weeks were sharply negative for both assets (BTC -11.48% and -9.11%; ETH -16.39% and -11.83%), so this week is a rebound in a declining market, but the data cannot say whether that decline has ended.
What a careful desk would check. BTC's close of 20,000.30 sat at 44.4% of its weekly range, mid-pack rather than at the top, while ETH closed at 69.0% of its range. Hourly correlation was 0.88, meaning the two assets still moved closely hour by hour even as ETH gained far more over the week. A desk would ask whether the ETH move can be hedged in BTC at that correlation, and how much of the 8.23% ratio change came in a few hours.
Funding. BTC perpetual funding averaged 0.0008% per eight hours, effectively flat, with a minimum of -0.0136%. ETH funding averaged -0.0057%, so short holders paid long ones on average even as ETH rose 10.69%.
What would change this reading
- If the ETH/BTC ratio gives back the 8.23% gain in a later week, this week reads as a short-lived divergence rather than a change in trend.
- If BTC trades below its weekly low of 19,540.00, the 2.27% gain and the 20,000.30 close were a pause inside the decline.
- If ETH funding turns positive while price stalls near 1,650.00, the longs that were being paid this week start paying instead.
- If BTC volume falls back towards its prior twelve-week average, the 1.32-times reading this week marks this as an active week rather than a new baseline.
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 rises when Ether outperforms
- funding rate
- the periodic payment between long and short holders of a perpetual futures contract; positive means longs pay shorts