Week of 28 August 2023: a wide week that ended lower on thin volume
When a week covers a wide price range but ends almost where it began, on below-average volume, what can the shape of that week tell us about which side of the market was in control?
BTC fell 0.50% (26,101.78 to 25,971.21) and ETH 1.36% (1,658.33 to 1,635.84). Both peaked at 16:00 UTC on Tuesday 29 August and bottomed at 17:00 UTC on Friday 1 September, closing in the lower third of an 11.09% BTC range on 0.95 of normal volume.
What the data shows. BTC opened at 26,101.78 and closed at 25,971.21, a fall of 0.50%; ETH fell 1.36%, from 1,658.33 to 1,635.84. Both assets set their weekly high at 16:00 UTC on Tuesday 29 August and their weekly low at 17:00 UTC on Friday 1 September, so the high came before the low. The close sat in the lower third of the week's range for both (22.7% for BTC, 23.4% for ETH). Tuesday was the best day (BTC +6.11%, ETH +4.62%) and Thursday 31 August the worst (BTC -4.98%, ETH -3.49%). Volume was light: 6.88 billion dollars for BTC and 2.95 billion for ETH, at 0.95 and 0.85 of the prior twelve-week average.
What it does not show. The candles record where price went, not why the Tuesday rise faded or who was selling into Friday. Volume being below average is a count of trading, not of the size of positions waiting to be filled. Nothing here says what happened after 23:59 UTC on Sunday 3 September.
What a careful desk would check. BTC travelled a range of 11.09% and still closed 0.50% lower. Realised volatility, the swings that actually occurred scaled to a yearly figure, was 52.4% for BTC and 44.6% for ETH, while the largest one-hour move was 5.53% for BTC in the hour starting 14:00 UTC on Tuesday, two hours before the weekly high. Stops set inside a range that wide can be hit without the week's net move going anywhere. The three falling weeks before this one (BTC -0.66%, -10.63%, -0.34%) also frame how the drift reads.
Ether against Bitcoin and funding. ETH tracked BTC closely (hourly correlation 0.96) but finished weaker: the ETH/BTC ratio changed -0.86%, and ETH's range (8.96%) was narrower than BTC's. BTC funding averaged 0.003% per eight hours and ETH 0.0012%, both slightly positive, with brief negative readings (-0.0109% for BTC, -0.0127% for ETH). Positive funding means long holders were paying short holders.
What would change this reading
- If a later week closes below this week's low of 25,333.75, the Friday low reads as a step down rather than the bottom of a range.
- If volume rises back above its prior twelve-week average while price holds above this week's close of 25,971.21, the thin week looks like a pause rather than a loss of interest.
- If funding turns negative and stays there while ETH keeps finishing below BTC, the relative weakness reads as positioning rather than noise.
- If BTC later closes above this week's high of 28,142.85, the Tuesday high was a local peak inside a range, not a rejected level.
Terms
- realised volatility
- how much the price actually swung over the week, expressed as a yearly percentage
- funding rate
- a regular payment between long and short holders of a perpetual futures contract; positive means longs pay shorts
- weekly range
- the distance between the week's lowest and highest price, shown as a percentage of the low