Week of 6 May 2024: BTC and ETH fall on below-average volume as the week closes near its lows
When both assets fall together on well-below-average trading volume, how should a desk read the decline: as conviction, or as a quiet drift lower?
BTC fell from 64,012 to 61,483.99 (-3.95%) and ETH from 3,136.4 to 2,929.29 (-6.6%). Both hit their weekly lows at 17:00 UTC on Friday 10 May and closed in the lower third of their ranges. Dollar volume was only 0.53 times BTC's and 0.45 times ETH's prior twelve-week average.
What the data shows. Both assets set their weekly highs at 08:00 UTC on Monday 6 May (BTC 65,500; ETH 3,221.4), a time the data places in the middle of the UTC day, and fell to their lows on Friday 10 May at 17:00 UTC (BTC 60,187.12; ETH 2,878.03). The worst day was Friday (BTC -3.61%, ETH -4.16%), which also contained the largest hourly moves in the same 14:00 UTC hour (BTC -3.08%, ETH -2.81%). The best day, Thursday 9 May, was modest (BTC +3.07%, ETH +2.09%). ETH fell further than BTC by 2.65 percentage points, so the ETH/BTC ratio dropped 2.76%. The two moved closely hour by hour (correlation 0.91). BTC closed at the 24.4th percentile of its weekly range and ETH at the 14.9th, both in the lower third.
What it does not show. Volume was light: 0.53 times the prior twelve-week average for BTC and 0.45 times for ETH. A light-volume decline can reflect a lack of buyers rather than active selling, and the data cannot separate the two. It also does not identify who was trading. Against 325 weeks of history, this week's BTC return ranked at the 22nd percentile and ETH's at the 20th, so the fall was real but not rare.
What a careful desk would check. Three of the prior four weeks were down for both assets, so this continues a soft patch rather than breaking one. Realised volatility, the size of the swings that actually happened scaled to a yearly figure, was 45.3% for BTC and 48.4% for ETH. A desk would watch whether the Friday lows of 60,187.12 for BTC and 2,878.03 for ETH hold in later weeks, since both closes sat only slightly above them and BTC was already 16.44% below its 52-week high.
Funding. Funding stayed near flat: BTC averaged 0.0051% per eight hours (range -0.001% to 0.01%) and ETH 0.0079% (range 0.004% to 0.01%). Longs paid shorts at these small positive rates. The funding data does not show how large those positions were or who held them.
What would change this reading
- If BTC trades below its Friday low of 60,187.12 in later weeks, the quiet drift turns into a breakdown on the record.
- If volume returns towards its twelve-week average while price stays near the close of 61,483.99, the decline gains participation it lacked this week.
- If ETH keeps falling faster than BTC and the ratio extends its 2.76% drop, the move becomes a relative one rather than a shared one.
- If funding turns negative while price sits near the lows, shorts would be paying to hold the winning side, a different signal from this week's flat rates.
Terms
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- percentile of range
- where the closing price sat between the week's low and high; at 0 it equals the low
- funding rate
- the periodic payment between long and short holders of a perpetual futures contract; positive means longs pay shorts