Week of 24 July 2023: Bitcoin and Ether fall slightly in a quiet week on light volume
When both assets fall only slightly on volume well below their recent pace, what does the week say about the market's direction, and what can it not say?
BTC fell from 30,083.75 to 29,281.09 (-2.67%) and ETH from 1,888.74 to 1,861.79 (-1.43%). Monday 24 July was the worst day for both. Volume ran at 0.61 times (BTC) and 0.55 times (ETH) their prior 12-week averages, on dollar volume of 4.93bn and 2.30bn.
What the data shows. The week's damage was concentrated in its first day. BTC hit its weekly high of 30,099.58 in the opening hour on Monday 24 July, then fell 3.02% that day, its largest daily loss of the week. Its low of 28,861.90 came at 15:00 UTC the same day, and the week's largest hourly move (-1.94%) arrived at 09:00 UTC. ETH followed the same pattern, with its high at 1,890.86 in Monday's first hour and its low of 1,833.19 at 09:00 UTC. The best day for both assets came later in the week, on Wednesday 26 July: BTC +0.42%, ETH +0.77%. The two markets moved closely (hourly correlation 0.88), but ETH lost less, so the ETH/BTC ratio rose 1.28%. Realised volatility — the size of the actual swings, scaled to a yearly figure — was 22.8% for BTC and 21.7% for ETH.
What it does not show. Low volume tells us little about why prices drifted. It does not tell us whether trading interest left the market or whether participants simply had no reason to act. The data also says nothing about who held positions or what came next.
What a careful desk would check. With BTC closing 33.9% of the way up its weekly range — inside the middle third — and volume at 0.61 times the prior 12-week average, the week offers no strong signal of direction. A desk would compare the modest -2.67% return against the 284 weeks of history behind it: this week sat at the 28th percentile of that history, so it was a relatively mild down week rather than an extreme one. The prior four weeks were also small moves (0.51%, -1.49%, 0.24%, -0.49%), so the pattern is quiet rather than a single quiet week.
Funding. BTC perpetual funding stayed positive all week, averaging 0.0069% per eight hours, and ETH's averaged 0.007%. Long positions were paying short ones, but the amounts were small.
What would change this reading
- If volume in later weeks stays below the prior 12-week average, this week reads as drift rather than a market making a decision.
- If BTC trades below Monday's low of 28,861.90, the week's base did not hold.
- If the ETH/BTC ratio keeps rising after its 1.28% gain here, ETH's relative strength is becoming a trend rather than a one-week gap.
- If funding turns negative while prices hold near these levels, the mild long-side pressure seen this week has reversed.
Terms
- realised volatility
- how much prices actually swung over a period, expressed as a yearly percentage
- close location
- where the closing price sits within the week's high-to-low range, as a percentage
- percentile
- the share of past weeks with a lower value; the 28th percentile means 28% of past weeks were lower