LMAX Digital volumes got off to a lighter start this week on account of the US holiday closure. Total notional volume for Monday came in at $346 million, 11% below 30-day average volume.

Bitcoin volume printed $133 million on Monday, 42% below 30-day average volume. Ether volume was however impressive, coming in at $167 million, 55% above 30-day average volume.

Looking at average position size over the past 30 days, we’re seeing average bitcoin position size at $11,718 and average position size for ether at $3,402.

Volatility has stabilized after bottoming out earlier this month. We’re looking at average daily ranges in bitcoin and ether of $1,478 and $97 respectively.

We’ve spent a lot of time highlighting all of the positive price catalysts in the crypto space, which should continue to drive prices higher throughout 2024. These include the bitcoin spot ETFs, upcoming bitcoin halving event, and anticipation for the approval of ether spot ETFs.

Our biggest concern over the short-term comes away from crypto fundamentals and into the world of global macro economics. All of the signs of late have suggested that central bank policy will need to be less investor friendly despite every effort from investors to force things away from these signs.

And if this reality of less accommodative policy continues to push through, there is risk that a record high US equity market will come tumbling down. Indeed, we’ve seen plenty of evidence of crypto assets being less correlated to traditional assets. At the same time, it would be hard to argue against an intense stock market sell-off weighing on crypto, at least for a short period of time.

Having said that, there is a strong argument to be made for bitcoin and broader crypto demand in a period of risk off in traditional markets. Bitcoin’s value proposition certainly lends itself to being an attractive flight to safety asset in periods of risk reduction.

And while ether is a more risk correlated cryptocurrency, there is too much innovation going on for investors to not be wanting to jump in and increasing exposure on dips, on the promise of what Ethereum will deliver.

So short-term, we are a little more cautious about the possibility for some weakness from global macro fallout. But crypto market participants should also find comfort in knowing that any such weakness will be used as opportunities to add to positions.

Activity is expected to pick-up today as the US market returns and as the market gets ready to take in tomorrow’s always anticipated Fed Minutes.