Week of 13 May 2024: Bitcoin gains 7.79% on below-average volume while Ether lags
When a weekly gain arrives on below-average trading volume, what does that say about the strength of the move, and what would later weeks need to show before the rebound could be read as a change of direction?
BTC rose 7.79%, from 61,484.0 to 66,274.01, and ETH 4.84%, from 2,929.3 to 3,071.19. Both closed in the upper third of their weekly ranges, yet dollar volume was below its prior twelve-week average (12.61bn for BTC, 0.61 times its average; 6.01bn for ETH, 0.53 times). BTC's gain ranked at the 80th percentile of 326 weeks.
What the data shows. BTC rose from 61,484.0 to 66,274.01, a gain of 7.79%, closing in the upper third of its 11.44% weekly range. The low of 60,749.21 came early, at 03:00 UTC on Monday 13 May, and the high of 67,700.0 arrived at 10:00 UTC on Sunday 19 May, so the week's low preceded its high. Wednesday 15 May was the best day (7.52%) and carried the largest hourly move, 2.07% at 12:00 UTC. ETH gained less, 4.84% from 2,929.3 to 3,071.19, so the ETH/BTC ratio (Ether's price measured in Bitcoin) fell 2.73% and BTC beat ETH by 2.95 percentage points. Dollar volume was 12.61bn for BTC and 6.01bn for ETH, equal to 0.61 and 0.53 times their prior twelve-week averages, so both traded below their recent norms.
What it does not show. Volume figures do not identify who traded, and low volume does not by itself establish that a move is weak or strong. The candles cannot say whether the advance came from spot demand or from positioning in derivatives. Nothing here shows what followed the Sunday high.
What a careful desk would check. Realised volatility, the swings that actually occurred scaled to a yearly percentage, was 37.6% for BTC and 43.3% for ETH. The largest hourly moves were 2.07% and 2.17%, so limits set on this week's data would assume a calm market. The four prior BTC weeks were -1.1%, -2.81%, 1.42% and -3.95%, so the gain followed three down weeks; its return ranked at the 80th percentile of the 326 weeks of history recorded, meaning 80% of past weeks were lower. BTC still sat 9.93% below its 52-week high and ETH 24.5%, so the week recovered ground without reaching a new peak.
Funding. BTC funding, the periodic payment between long and short holders of perpetual futures contracts, averaged 0.0048% per eight hours and ranged from -0.0008% to 0.01%. ETH averaged 0.0076%, ranging from 0.0034% to 0.01%. Small positive values mean longs paid shorts a modest running cost, but these figures do not show how large those positions were.
What would change this reading
- If a later week closes above this week's high of 67,700.0, the rebound reads as more than a pause inside the prior slide.
- If later weeks again show volume below their prior twelve-week averages while price rises, the advance carries less confirmation than its size suggests.
- If the ETH/BTC ratio falls by more than 2.73% in a later week, Ether's lag becomes a pattern rather than one week's difference.
- If funding falls towards -0.0008% while price holds near 66,274.01, the paying side of the market changes.
Terms
- realised volatility
- how much the price actually swung over the week, expressed as a yearly percentage
- ETH/BTC ratio
- Ether's price measured in Bitcoin; it falls when Ether underperforms Bitcoin
- funding
- a regular payment between long and short holders of a perpetual futures contract that keeps its price close to the spot price