Week of 26 August 2024: Bitcoin and Ether both fall more than 10% on below-average volume
When two assets fall double digits in the same week but trading volume runs below its recent average, what does the week reveal about the strength of the selling, and what remains unmeasurable?
BTC fell from 64,219.99 to 57,301.86 (-10.77%) and ETH from 2,746.12 to 2,425.72 (-11.67%). Both weekly returns sit at the 10th percentile of 341 recorded weeks. Dollar volume ran below the prior 12-week average for both assets, and both closed in the lower third of their weekly ranges.
What the data shows. Both assets peaked in the week's first hour, at 64,481.00 for BTC and 2,762.00 for ETH on Monday 26 August, then spent the week lower. Tuesday 27 August was the worst day for both (BTC -5.44%, ETH -8.33%), and it also produced the largest hourly move, -2.33% for BTC and -3.53% for ETH in the hour starting 21:00 UTC. BTC then ground down to its low of 57,201.00 at 14:00 UTC on Sunday 1 September, while ETH had already set its low of 2,392.96 on Tuesday evening and traded above it thereafter. BTC's close sat 1.4% of the way up from its weekly low; ETH's sat 8.9%. The two moved closely (hourly correlation 0.89), and the ETH/BTC ratio fell 1.0%, so this was a broad decline rather than one asset breaking away.
What it does not show. Volume tells us about participation, not motive. BTC's dollar volume of 10.6 billion was 0.84 times its prior 12-week average and ETH's 5.01 billion was 0.73 times, so the fall happened on lighter turnover than recent weeks. That is consistent with sellers meeting thin bids rather than heavy two-way trading, but the data cannot confirm it, and it does not identify who was selling or whether positions were closed under pressure.
What a careful desk would check. A 10th percentile ranking across 341 recorded weeks means only a small share of past weeks were more severe. Realised volatility reached 50.8% for BTC and 67.6% for ETH. A desk would note that the four prior weeks were mixed (-14.78%, 0.95%, -0.49%, 9.91% for BTC), so this week extends an uneven decline rather than reversing a clear trend, and would compare its stop distances with the -2.33% and -3.53% hourly moves rather than with an average week.
Ether against Bitcoin. ETH lost 0.9 percentage points more than BTC over the week, and sat 40.37% below its 52-week high against BTC's 22.12%. The 1.0% drop in the ratio is small next to the weekly moves, which keeps the reading on relative strength weak.
What would change this reading
- If a later week trades below BTC's 57,201.00 low while volume again stays under its 12-week average, the light turnover this week reads as a lack of buyers rather than orderly distribution.
- If BTC recovers towards its weekly open of 64,219.99, this week reads as a shakeout absorbed within a range that has already produced a -14.78% week and a 9.91% week.
- If the ETH/BTC ratio falls further from its -1.0% weekly change, the broad decline is becoming a relative one, which changes which hedge is useful.
- If funding turns from its near-zero average of 0.0014% per eight hours into clearly negative territory while price keeps falling, short holders are paying to hold a winning side.
Terms
- realised volatility
- how much the price actually swung over a period, expressed as a yearly percentage
- ETH/BTC ratio
- the price of one Ether expressed in Bitcoin; it rises when Ether outperforms Bitcoin and falls when it lags
- percentile
- the share of past weeks with a milder result; the 10th percentile means only a small share of recorded weeks were more severe