Week of 31 October 2022: Bitcoin rises 1.35% while Ether falls 1.39% in the same week
When Bitcoin and Ether close a week in opposite directions yet still move together hour by hour, what does the gap between them actually measure, and what would show whether it is persisting?
BTC rose from 20,627.48 to 20,905.58 (+1.35%) while ETH fell from 1,590.45 to 1,568.29 (-1.39%), a gap of 2.74 percentage points, and the ETH/BTC ratio dropped 2.71%. Hourly correlation stayed very close at 0.9. BTC traded 1.24 times its prior twelve-week dollar volume; ETH traded 0.96 times its own.
What the data shows. Both assets set their low before their high. BTC bottomed at 20,031.24 at 12:00 UTC on Thursday 3 November and topped at 21,480.65 at 03:00 UTC on Saturday 5 November, a range of 7.24%. ETH bottomed at 1,502.32 at 21:00 UTC on Wednesday 2 November and topped at 1,680.0 at 14:00 UTC on Friday 4 November, a range of 11.83%. Friday 4 November was the best day for both (BTC +4.66%, ETH +7.43%), and that same hour at 14:00 UTC carried BTC's largest one-hour move (+2.21%) and ETH's weekly high. Their worst days differed: Sunday 6 November for BTC (-1.85%) and Wednesday 2 November for ETH (-3.81%). ETH's largest one-hour move was -3.6% at 13:00 UTC on Monday 31 October. Realised volatility, the swings that actually occurred scaled to a yearly figure, was 38.5% for BTC and 65.1% for ETH.
What it does not show. The candles show that the two prices moved closely together while closing in opposite directions. They do not say why Ether lagged, who traded it, or whether the gap widens next week. Funding stays ambiguous here: BTC averaged 0.0039% per eight hours and ETH 0.0034%, both small, and each spent part of the week negative (BTC minimum -0.0011%, ETH minimum -0.0089%), so payments ran in both directions.
What a careful desk would check. A gap of 2.74 percentage points inside a week of 0.9 correlation is a relative move, not two separate markets. A desk would look at whether ETH's wider range (11.83% against 7.24%) and higher realised volatility explain the gap on their own, and at whether ETH volume (0.96 times its average) points to less participation in its decline. Both assets sit far below their 52-week highs (BTC -69.54%, ETH -67.64%), so the split occurs deep in a drawdown.
Ether against Bitcoin. The ETH/BTC ratio fell 2.71% over the week. Its direction is the cleanest reading of which asset moved less or more than the other, and it is unaffected by anything shared by both.
What would change this reading
- If the ETH/BTC ratio falls again in a later week, this week reads as the start of a sustained relative weakness rather than one week of lag.
- If hourly correlation drops below 0.9, the pair is separating as well as diverging, and the two legs need separate reading.
- If a later week closes above BTC's weekly high of 21,480.65 and ETH stays below 1,680.0, the gap this week measures becomes a trend.
- If funding turns clearly negative for both assets while prices hold, the divergence may reflect positioning rather than price pressure alone.
Terms
- hourly correlation
- how closely two prices moved together hour by hour, on a scale from -1 to 1
- realised volatility
- how much the price actually swung over the week, expressed as a yearly percentage
- ETH/BTC ratio
- Ether's price divided by Bitcoin's; when it falls, Ether is losing value relative to Bitcoin
- funding rate
- the periodic payment between long and short holders of a perpetual futures contract; positive means longs pay shorts