Week of 12 September 2022: Ether falls 24% against Bitcoin's 11% as shorts pay funding
When Ether falls more than twice as far as Bitcoin in the same week, what do price and funding data say about which side of the market was under pressure?
BTC fell from 21,826.87 to 19,416.18 (-11.04%) and ETH from 1,766.12 to 1,334.51 (-24.44%), a gap of 13.4 percentage points. Both fell hardest in the hour starting 12:00 UTC on Tuesday 13 September. ETH funding averaged -0.056% per eight hours while BTC funding was near zero.
What the data shows. BTC fell from 21,826.87 to 19,416.18 (-11.04%) and ETH from 1,766.12 to 1,334.51 (-24.44%). The two assets fell together (hourly correlation 0.83) but ETH fell harder, so the ETH/BTC ratio dropped 15.06%. The worst hour for both was the hour starting 12:00 UTC on Tuesday 13 September: BTC -4.99%, ETH -6.27%. BTC's weekly high of 22,799 also falls in that hour, so the high and the largest hourly fall are recorded at the same time; ETH had set its high earlier, at 01:00 UTC on Monday 12 September. Both closed in the lower third of their ranges, BTC at 2.8% and ETH at 2.0% of the way up from the low. BTC dollar volume was 1.76 times its prior twelve-week average; ETH volume was 0.88 times, below average. The weekly returns ranked at the 12th percentile for BTC and the 4th for ETH, out of 239 weeks of history. BTC was 71.71% below its 52-week high and ETH 72.47% below its own.
What it does not show. The data records prices, volumes and funding payments. It does not identify what moved the market or who was trading. ETH's larger loss came on lower volume than its own average, which could reflect many different settings; the data cannot separate them.
What a careful desk would check. Funding is the periodic payment between long and short holders of a perpetual contract; negative rates mean shorts pay longs. ETH funding averaged -0.056% per eight hours and touched -0.3019%, while BTC funding was near zero at +0.0052%. That gap suggests ETH's bearish positioning was far more one-sided. Realised volatility, the size of the swings that actually happened, was 62.9% annualised for BTC and 97.5% for ETH, so a position sized in BTC terms would carry materially more risk in ETH terms.
Ether against Bitcoin. Over the prior four weeks ETH fell 16.39% and 11.83% in its two down weeks and rose 10.69% and 11.83% in its two up weeks. This week repeated the down direction at larger scale, which reads as higher sensitivity to direction rather than a separate trend.
What would change this reading
- If ETH funding returns towards zero in later weeks while price holds above 1,325.55, the negative reading was a temporary positioning extreme rather than a lasting shift.
- If a later week closes below the ETH low of 1,325.55 with volume above its prior twelve-week average, the fall gains participation and reads differently.
- If ETH recovers towards its weekly open of 1,766.12 while BTC does not, the 13.4 percentage point gap was a relative move that unwinds.
- If BTC funding turns negative in the following weeks, the near-zero average this week was the start of a broader shift in positioning.
Terms
- funding rate
- the periodic payment between long and short holders of a perpetual futures contract; negative means shorts pay longs
- percentile
- the share of past weeks with a lower value; the 4th percentile means 4% of the 239 past weeks were lower
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage