Week of 20 March 2023: Bitcoin and Ether end flat after an 8.5% swing inside one week
When two assets close the week almost exactly where they opened, what does an 8.5% inner range tell a trader about risk, and what does the flat close hide?
BTC moved from 27,972.87 to 27,968.05 (-0.02%) and ETH from 1,780.67 to 1,773.88 (-0.38%), yet BTC traded an 8.52% weekly range and ETH an 8.6% one. BTC's high and low both fell on Wednesday 22 March, where its largest hourly move was -4.85%. BTC volume was 0.86 times its prior twelve-week average; ETH volume was 1.39 times.
What the data shows. The week was two moves. BTC set its weekly high of 28,868.05 at 18:00 UTC on Wednesday 22 March and its low of 26,601.80 two hours later at 20:00 UTC. Inside that gap sat the week's largest hourly move, -4.85% starting at 19:00 UTC, and Wednesday was also the worst day (-3.05%). Thursday 23 March reversed it: the best day of the week, +3.83% for BTC and +4.58% for ETH. ETH followed the same calendar but a different order — its low came first (1,710.12 on Wednesday 19:00 UTC) and its high a day later (1,857.16 on Thursday 15:00 UTC). Both closed in the middle third of their weekly range (BTC at 60.3%, ETH at 43.4%). Hourly correlation was 0.84 and the ETH/BTC ratio changed only -0.36%, so the two moved together.
What it does not show. A flat close does not mean a quiet week. It also does not tell us why the swing happened on Wednesday, who traded it, or whether Thursday's rebound held beyond the week's close. Volume tells us BTC turnover was below its recent norm (0.86 times the prior twelve weeks) while ETH's was above (1.39 times), but not which side of the trade was new money.
What a careful desk would check. Realised volatility, the size of the swings that actually happened scaled to a yearly figure, was 68.1% for BTC and 63.5% for ETH — high relative to a -0.02% and -0.38% weekly return. A position sized on the flat weekly return would be badly mismatched to a -4.85% hour. Both assets sat well below their 52-week highs: BTC 41.7% below, ETH 49.95% below, after a prior four weeks in which BTC fell three times and rose once, including a +27.16% week.
Funding. Perpetual funding stayed near zero — averaging 0.004% per eight hours for BTC (high 0.01%, low -0.0033%) and 0.0056% for ETH. Neither side paid a meaningful carry to hold through the swing.
What would change this reading
- If BTC trades below this week's low of 26,601.80 in a later week, the Wednesday swing reads as the start of a decline rather than a one-day range.
- If BTC returns towards its weekly high of 28,868.05 while its dollar volume stays below this week's 40.09 billion, which was already 0.86 times its prior twelve-week average, the recovery still lacks participation.
- If the ETH/BTC ratio moves well beyond its -0.36% change, the close tie between the two assets has broken and hedges between them need rethinking.
- If realised volatility stays near 68% while weekly returns stay near zero, ranges will keep exceeding what the flat closes suggest.
Terms
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- close location
- where the week's close fell within the week's high-to-low range, as a percentage
- perpetual funding
- a regular payment between long and short holders of a perpetual futures contract; positive means longs pay shorts