Week of 29 January 2024: Bitcoin and Ether rise 1.31% and 1.46% on quiet volume
When two assets post a small weekly gain on quiet volume and mild volatility, what does that stability actually tell a desk about the weeks ahead?
BTC rose from 42,031.05 to 42,582.88 (+1.31%) and ETH from 2,256.9 to 2,289.79 (+1.46%). Both fell to their weekly lows on Monday 29 January, then rose to highs on Tuesday 30 January. Dollar volume was 8.71bn for BTC and 4.45bn for ETH, at 0.75 and 0.71 times their prior twelve-week averages.
What the data shows. Both assets bottomed at 14:00 UTC on Monday 29 January — BTC at 41,804.88 and ETH at 2,233.8 — and set their weekly highs on Tuesday: BTC at 43,882.36 at 12:00 UTC and ETH at 2,391.98 at 21:00 UTC. After that, the week drifted sideways and slightly down, ending at 42,582.88 and 2,289.79. Both closes sat in the middle third of their weekly ranges (BTC at 37.4% of the range, ETH at 35.4%). BTC's realised volatility, the size of the swings that actually happened scaled to a yearly figure, was 37.1%; ETH's was 41.0%. The largest hourly move was modest: -1.83% for BTC in the hour starting 20:00 UTC on Wednesday 31 January and -1.68% for ETH at 01:00 UTC on Thursday 1 February. The two assets moved closely (hourly correlation 0.84) and the ETH/BTC ratio barely shifted (+0.14%), so this was a broad move of the same size in both.
What it does not show. A quiet week does not say why it was quiet, or whether the calm will hold. Volume running at 0.75 times (BTC) and 0.71 times (ETH) the prior twelve-week average could mean conviction is low or that nothing forced anyone to trade; the data cannot separate those. It also cannot say whether the post-Tuesday drift lower was distribution or simply an absence of buyers.
What a careful desk would check. Both assets remain well below their 52-week highs (BTC by 12.33%, ETH by 15.37%), and both sit near the middle of their return history (53rd and 54th percentile of 311 weeks). A desk would read this week as range-bound and low-energy, and would check whether volatility of this level persists or whether the prior four weeks' mixed direction (two up, two down for BTC; three down, one up for ETH) resolves into a trend. It would also verify that risk limits sized against this week's 4.97% (BTC) and 7.08% (ETH) ranges hold up against the largest single-hour moves.
Funding. BTC perpetual funding averaged 0.0089% per eight hours, with a maximum of 0.01% and a minimum of 0.0022%. ETH averaged 0.0085%, between 0.0032% and 0.01%. Positive funding means long positions were paying short ones, but the rates are small enough to signal only mild lean rather than meaningful crowding.
What would change this reading
- If volume returns to or above its prior twelve-week average while price stays inside this week's BTC range of 41,804.88 to 43,882.36, the quiet reads as a pause rather than an absence of interest.
- If BTC trades below 41,804.88 or ETH below 2,233.8 in a later week, this week's Monday lows stop functioning as support.
- If the ETH/BTC ratio moves well beyond its 0.14% weekly change, the two assets stop moving as one and the pair hedge needs re-examining.
- If funding rises sharply while volume stays low, a small number of leveraged positions could be driving price in a thin market.
Terms
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- perpetual funding
- a regular payment between long and short holders of a perpetual futures contract; positive means longs pay shorts
- close location
- where the week's closing price fell within the week's high-to-low range, expressed as a percentage