Week of 29 May 2023: Bitcoin slips 3.38% on volume at a quarter of its prior average
When both assets drift lower on unusually thin trading, what does the week say about the market's direction, and what can thin volume itself not tell us?
BTC fell from 28,065.01 to 27,115.21 (-3.38%) and ETH from 1,908.64 to 1,890.01 (-0.98%). BTC dollar volume was 0.27 times its prior twelve-week average, ETH's 0.53 times. Both peaked on Monday 29 May and closed below their opening levels, with BTC in the lower third of its weekly range.
What the data shows. Both assets peaked early: BTC's high of 28,447.14 and ETH's high of 1,927.62 both came in the first hour on Monday 29 May, though each open sat just below that high (BTC 1.36%, ETH 0.99%). From there the market drifted down. BTC reached its low of 26,505.00 at 00:00 UTC on Friday 2 June, a range of 7.33% from high to low, and closed at 27,115.21 in the lower third of that range. ETH's low of 1,840.00 arrived earlier, at 03:00 UTC on Thursday 1 June, and its close sat in the middle third of its 4.76% range. The worst day for both was Wednesday 31 May (BTC -1.75%, ETH -1.42%), which also held the largest hourly move for both (-1.44% for BTC, -1.25% for ETH, in the hour starting 04:00 UTC). The two moved closely, with hourly correlation 0.89, but ETH fell less, so the ETH/BTC ratio rose 2.49%.
What it does not show. The data cannot explain the drift. Trading volume was well below normal for both assets, and thin markets can move on small orders, so the direction of the week is weak evidence about where deeper demand sits. Nothing here identifies who was trading or whether the move reflected position building, liquidation or simple inactivity.
What a careful desk would check. BTC's weekly return ranked at the 25th percentile of 276 recorded weeks, and it sits 14.03% below its 52-week high (ETH 11.19% below). Three of the prior four weeks were down for BTC. A desk would compare the 1.44% largest hourly move with its own stop spacing and ask whether the thin volume makes this week's levels worth trusting as reference points.
What would change this reading
- If later weeks see volume return towards the prior twelve-week average while price holds below 27,115.21, the drift reads as distribution rather than inactivity.
- If BTC trades below its weekly low of 26,505.00, the quiet week was an early stage of a larger decline.
- If the ETH/BTC ratio keeps rising after a 2.49% weekly gain, the relative outperformance is becoming a trend rather than a one-week divergence.
Terms
- percentile
- the share of past weeks with a lower value; the 25th percentile means most of the 276 recorded weeks were higher
- ETH/BTC ratio
- the price of one Ether expressed in Bitcoin; it rises when Ether outperforms Bitcoin
- hourly correlation
- how closely two prices moved together hour by hour, from -1 to 1