Week of 18 September 2023: both assets fall on light volume and close in the lower third
When two assets fall only slightly but close near the bottom of their weekly range on below-average volume, how should a desk read that mix of price and activity?
BTC fell 1.05% to 26,248.38 and ETH 2.57% to 1,580.71, both closing in the lower third of their weekly range. Dollar volume was 0.81 times the prior 12-week average for BTC and 0.68 for ETH. Funding stayed near zero for both.
What the data shows. BTC rose early, reaching its weekly high of 27,483.57 at 16:00 UTC on Tuesday 19 September, then gave it back: Thursday 21 September was the worst day for both assets (BTC -2.05%, ETH -2.36%), and BTC's low of 26,122.08 arrived in the final hour of the week, Sunday 24 September. Both closes sat in the lower third of the week's range, so most of the week's trading happened above where prices finished. ETH fell further than BTC, dropping the ETH/BTC ratio by 1.54%. Both moves were small in history's terms: BTC's return ranked at the 37th percentile and ETH's at the 32nd of the 292 weeks recorded before them. Dollar volume was below the prior twelve-week average for both (0.81 times for BTC, 0.68 for ETH).
What it does not show. Low volume is a fact about activity, not intent. Nothing here says whether the quiet week reflects waiting, indifference, or a shortage of sellers. The lower-third close does not say whether prices continued lower afterwards, and the data on this week cannot establish a trend from three declining weeks out of the prior four.
What a careful desk would check. Realised volatility, the size of the swings that actually happened scaled to a yearly figure, was 30.7% for BTC and 26.4% for ETH, both modest. A desk would note that the largest hourly move was only -1.78% for BTC, well inside a quiet week, so risk limits set here would be tight if volatility returned. The Sunday low, arriving last, is the point to retest before reading the decline as finished.
Funding. Perpetual funding, the regular payment between long and short holders of futures contracts, averaged 0.0007% per eight hours for BTC and 0.0023% for ETH. With ranges of -0.0068% to 0.0074% and -0.0013% to 0.0077%, neither side paid meaningfully to hold its position.
What would change this reading
- If BTC trades below its Sunday low of 26,122.08 in a later week, the week's drift lower reads as the start of a move rather than a pause.
- If BTC recovers above its weekly high of 27,483.57 while volume stays below its prior 12-week average, the week reads as a quiet range rather than distribution.
- If ETH keeps falling faster than BTC and the ETH/BTC ratio drops further from its -1.54% change, the relative weakness has become its own story rather than a broad one.
- If funding moves well outside its near-zero weekly averages, one side of the perpetual market is starting to pay, which changes the cost of carrying a position.
Terms
- close location
- where the closing price fell within the week's high-to-low range; the lower third means most of the week's trading was above the close
- percentile
- the share of past weeks with a smaller move; the 37th percentile for BTC means this week's fall was modest against the 292 weeks recorded before it
- perpetual funding
- a regular payment between long and short holders of a perpetual futures contract that keeps its price close to the spot price