Week of 5 June 2023: both assets fall on light volume, closing in the lower third
When Bitcoin and Ether fall together but on below-average volume and close near their weekly lows, does the week point to direction, or to a market that simply ran out of buyers?
BTC fell from 27,115.20 to 25,925.55 (-4.39%) and ETH from 1,890.00 to 1,752.76 (-7.26%). Both closed in the lower third of their weekly range. BTC dollar volume was 9.12 billion, or 0.47 times its prior 12-week average, well below normal.
What the data shows. The two assets fell together (hourly correlation 0.92) and both had their worst single hourly move in the same hour, starting 15:00 UTC on Monday 5 June (BTC -2.96%, ETH -2.54%). BTC's worst day was Monday (-5.12%). The best day for both followed on Tuesday 6 June (BTC +5.84%, ETH +4.10%), and BTC's weekly high of 27,391.77 came at 00:00 UTC on Wednesday 7 June. That bounce did not hold; BTC closed at 25,925.55, 16.21% below its 52-week high, at the 23rd percentile of the 277 weeks recorded. The week's range was 8.05% for BTC and 10.69% for ETH, and volume ran below the prior twelve-week average for both (0.47 times for BTC, 0.81 for ETH).
What it does not show. Light volume with a lower close is consistent with a market where few participants were active, but the data cannot say whether selling pressure was heavy or buying simply absent. It records no order-book depth and no open interest, so the size of any position behind the move is unknown. Tuesday's +5.84% day does not establish a bottom, and Saturday's ETH low does not establish a top.
What a careful desk would check. Realised volatility, the size of the swings that actually happened scaled to a yearly figure, was 48.3% for BTC and 45.1% for ETH — moderate, and not out of line with a market already 16.21% and 17.64% below its 52-week highs. A desk would compare the Monday hour with its own stop distances and ask whether exits could have been filled inside it, then weigh the low volume against the possibility that the week's direction reflects inactivity rather than conviction.
Ether against Bitcoin. ETH fell 2.87 percentage points more than BTC, and the ETH/BTC ratio dropped 3.01% over the week. The lows came on different days: BTC set its low at 12:00 UTC on Tuesday 6 June, while ETH set its low at 08:00 UTC on Saturday 10 June. ETH's worst day was Saturday (-4.83%).
What would change this reading
- If BTC trades below its weekly low of 25,351.02 in a later week, this week's quiet decline reads as the start of a leg rather than a pause.
- If the ETH/BTC ratio keeps falling after a -3.01% week, the weakness has become a relative story and hedges priced on correlation of 0.92 will misfire.
- If volume returns towards its prior twelve-week average while price holds above the weekly low, the low-volume decline reads as a lack of interest rather than active selling.
- If funding, which averaged 0.005% per eight hours for BTC, turns negative while price holds near the lows, short positioning is becoming crowded.
Terms
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- ETH/BTC ratio
- the price of one Ether divided by the price of one Bitcoin; it falls when Ether underperforms Bitcoin
- percentile
- the share of past weeks with a lower value; the 23rd percentile means most recorded weeks were higher