Week of 22 January 2024: Bitcoin gains 1.08% while Ether loses 8.15%
When Bitcoin and Ether move in opposite directions over one week, what does the price data show about the split, and what can it not say about its cause?
BTC rose from 41,580.32 to 42,031.06 (+1.08%) while ETH fell from 2,457.06 to 2,256.90 (-8.15%). Both hit their weekly low in the same hour, Tuesday 23 January 14:00 UTC, but only BTC recovered. The ETH/BTC ratio dropped 9.13%.
What the data shows. BTC and ETH shared a low: 38,555.00 and 2,168.07, both at 14:00 UTC on Tuesday 23 January. From there they separated. BTC closed the week at 42,031.06, in the upper third of its range, after a best day of +4.66% on Friday 26 January. ETH closed at 2,256.90, in the lower third of its range, with a best day of only +2.21% on the same Friday. ETH's worst day, -5.81% on Monday 22 January, came while BTC's worst day was -4.84%. ETH also recorded the week's sharper single-hour move, -3.40% starting 09:00 UTC on Tuesday. Both assets traded at normal activity levels: BTC dollar volume of 11.12 billion was 0.98 times its prior twelve-week average, ETH's 5.97 billion was 0.97 times. BTC's weekly return ranked at the 52nd percentile of 310 weeks; ETH's at the 17th.
What it does not show. Prices record the size and timing of the split, not its cause. Nothing here identifies who sold ETH or why BTC recovered. The hourly correlation of 0.82 says the two moved closely but not identically; it does not explain the divergence. Both remain below their 52-week highs, BTC by 13.47% and ETH by 16.59%, but the gap alone says nothing about direction: the prior four weeks were mixed for BTC (-1.65%, 3.89%, -5.00%, -0.36%) and for ETH (0.79%, -2.65%, 11.32%, -0.64%).
What a careful desk would check. ETH's realised volatility, the size of the swings that actually happened scaled to a yearly figure, was 51.4% against BTC's 44.2%, consistent with the wider weekly range (13.75% versus 11.12%). A position sized equally in both assets carried different risk this week. With three of the prior four weeks down for BTC, its recovery to the upper third of the range is worth testing against later weeks rather than read as a turn.
Ether against Bitcoin. The ETH/BTC ratio fell 9.13%, the clearest measure of the split. ETH opened just 0.37% below its weekly high and closed in the lower third of its weekly range; BTC did the reverse. Funding stayed positive for both, averaging 0.0096% per eight hours for BTC and 0.0094% for ETH, so longs paid shorts on average in both markets even as ETH fell.
What would change this reading
- If the ETH/BTC ratio continues to fall after this week's 9.13% drop, the split reads as a trend rather than a one-week divergence.
- If ETH trades below its low of 2,168.07 while BTC holds above 38,555.00, the Tuesday shared low stops being a common floor.
- If BTC closes a later week below its open of 41,580.32, this week's gain reads as a rebound inside a decline rather than a recovery.
- If funding for either asset turns negative while price holds near its weekly close, the mild long-side crowding implied by positive rates has eased.
Terms
- ETH/BTC ratio
- the price of one Ether expressed in Bitcoin; it falls when Ether underperforms Bitcoin
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- percentile
- the share of past weeks with a lower value; the 17th percentile means most recorded weeks were higher