Week of 31 July 2023: BTC and ETH slip on below-average volume with funding barely positive
When a quiet week ends slightly lower on thin trading, what does the price path and the funding rate actually establish, and what does it leave open?
BTC fell 0.66% (29,281.09 to 29,088.42) and ETH 1.69% (1,861.79 to 1,830.28). Both set their weekly low at 15:00 UTC on Tuesday 1 August and their high at 01:00 UTC on Wednesday 2 August, then closed the week below their opening levels. Dollar volume was 0.73 times BTC's and 0.63 times ETH's prior twelve-week average.
What the data shows. Both assets bottomed first and peaked after: the low for each came at 15:00 UTC on Tuesday 1 August (BTC 28,585.70, ETH 1,813.80) and the high at 01:00 UTC on Wednesday 2 August (BTC 30,047.50, ETH 1,879.74); both then closed the week below their opening levels. Tuesday was the best day for both (BTC +1.62%, ETH +0.93%) and Wednesday the worst (BTC -1.75%, ETH -1.79%). Realised volatility, a yearly-scaled measure of how much prices actually swung, was modest: 23.2% for BTC and 22.4% for ETH. The largest hourly move was +1.55% for BTC and -1.27% for ETH. Trading was thin: BTC dollar volume of 5.57 billion was 0.73 times its prior twelve-week average, ETH's 2.44 billion was 0.63 times. BTC closed at 34.4% of its weekly range, the middle third; ETH closed at 25.0%, the lower third.
What it does not show. The data records the sequence, not the reason. A Tuesday low followed by a Wednesday high that faded tells us nothing about who was buying or selling, and nothing about what came after Sunday's close. Volume below the twelve-week average does not distinguish indifference from a lack of participants. The ETH/BTC ratio fell 1.04%, but one week of underperformance does not establish a trend.
What a careful desk would check. BTC was 7.97% below its 52-week high and ETH 14.0% below. Four weeks before, three were down for both assets, and this week's return ranked at the 41st percentile of 285 for BTC and the 38th for ETH — ordinary, not extreme. A desk would note that the close sat inside the range rather than at either edge, so the week offers no resolution, and would look at whether later weeks break above 30,047.50 or below 28,585.70.
Funding. Perpetual funding, the periodic payment between long and short holders that keeps futures near spot, averaged 0.0087% per eight hours for BTC and 0.0075% for ETH. BTC's rate stayed above zero all week (low 0.0024%). ETH's ranged from 0.0% to 0.01%, so longs paid shorts on average, but not in every eight-hour window. These levels are small: the carry on a leveraged long is minor unless it persists for weeks.
What would change this reading
- If a later week closes above the Wednesday high of 30,047.50 for BTC, this week's fade reads as a pause rather than a ceiling.
- If price trades below the Tuesday low of 28,585.70, the three down weeks before this one extend rather than stall.
- If ETH's 1.04% ratio underperformance repeats, the weakness is becoming a relative move rather than a shared one.
- If volume stays near 0.73 times the twelve-week average while price breaks either edge, the move comes from a thin market, which is worth weighting differently.
Terms
- realised volatility
- how much the price actually swung over the period, expressed as a yearly percentage
- perpetual funding
- a regular payment between long and short holders of a perpetual futures contract that keeps its price close to the spot price; positive means longs pay shorts
- close location
- where the closing price fell within the week's high-to-low range, as a percentage