Week of 13 February 2023: Bitcoin gains 11.43% and Ether 10.89% after two down weeks
When two assets post double-digit weekly gains while still 49.4% and 52.61% below their 52-week highs, what does the week's data establish about the move, and what does it leave open?
BTC rose from 21,782.37 to 24,271.76 (+11.43%), ETH from 1,514.82 to 1,679.75 (+10.89%). The largest day was Wednesday 15 February (BTC +9.57%). Volume ran 1.86 times (BTC) and 1.57 times (ETH) the prior 12-week average, and BTC still closed 49.4% below its 52-week high.
What the data shows. BTC rose from 21,782.37 to 24,271.76 (+11.43%) and ETH from 1,514.82 to 1,679.75 (+10.89%). Both set their weekly lows early, on Monday 13 February (BTC 21,351.07 at 17:00 UTC, ETH 1,461.93 at 16:00 UTC), and their highs on Thursday 16 February at 16:00 UTC. The best day was Wednesday 15 February (BTC +9.57%, ETH +7.66%), which held BTC's largest hourly move, +3.54% at 20:00 UTC. Both closed in the upper third of their weekly ranges (BTC 74.9%, ETH 77.5%). Dollar volume was 1.86 times the prior twelve-week average for BTC and 1.57 times for ETH. The two moved closely (hourly correlation 0.89) and the ETH/BTC ratio fell 0.49%, so BTC led by a small margin. This reversed a mixed prior month: BTC's four preceding weekly returns were 8.79%, 4.56%, -3.41% and -5.01%. The week's return ranked at the 87th percentile of the 261 weeks of history for BTC and the 79th for ETH.
What it does not show. Candles record the size and speed of a move, not its cause. Nothing here identifies who was buying or whether the buying was new money or short covering. BTC remained 49.4% below its 52-week high and ETH 52.61% below, so one strong week does not establish a change in the longer decline. Thursday 16 February carried both the weekly high for each asset at 16:00 UTC and the week's worst daily return (BTC -3.31%, ETH -2.21%); the data does not show how the day reversed after its peak.
What a careful desk would check. Realised volatility, the size of the swings that actually happened scaled to a yearly figure, was 58.9% for BTC and 55.2% for ETH. Because the low came before the high and the open sat 15.92% below the week's high for BTC, trend-following and reversion systems would have read the first half of the week in opposite ways. A desk would ask whether its sizing had assumed further weakness after two down weeks.
Funding. Perpetual funding, the periodic payment between long and short holders of a futures contract that keeps its price near the spot price, stayed positive all week for BTC: average 0.0093% per eight hours, maximum 0.0232%, minimum 0.0021%. ETH averaged 0.0078%, briefly touching -0.0005%. Longs were paying shorts, but at levels small next to an 11.43% weekly gain.
What would change this reading
- If BTC closes a later week below this week's low of 21,351.07, the gain reads as a bounce inside the decline rather than a turn.
- If funding rises well above the week's 0.0232% maximum per eight hours while price stalls, longs are paying more for a position that has stopped rising.
- If volume falls back towards the prior twelve-week average after 1.86 times for BTC, this week's activity was a one-week event rather than a sustained change.
- If the ETH/BTC ratio turns up from its -0.49% weekly change, BTC's small lead has ended and the two are no longer moving as one.
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 87th percentile means 87% of the 261 past weeks were lower
- funding rate
- the periodic payment between long and short holders of a perpetual futures contract; positive means longs pay shorts