LMAX Digital volumes improved from Monday’s softer start. Total notional volume for Tuesday came in at $212 million, 10% below 30-day average volume.

Breaking it down per coin, bitcoin volume came in at $84 million, 33% below 30-day average volume. Ether volume came in at $47 million, 28% above 30-day average volume.

Looking at average position size over the past 30 days, we’re seeing average bitcoin position size at $6,111 and average position size for ether at $1,210.

Volatility is consolidating after a sharp rise out from multi-month lows. We’re looking at average daily ranges in bitcoin and ether of $2,159 and $87 respectively.

Crypto markets remain in consolidation mode, with Bitcoin holding below recent highs and Ether continuing to trade in a relatively contained range.

This remains consistent with our view that the explosive August recovery would be followed by a period of digestion before the next directional move.

Encouragingly, the consolidation has allowed previously overbought daily technical studies to unwind toward neutral territory without producing a significant reversal.

This suggests the market may be getting closer to the end of this corrective phase, although a fresh catalyst will likely be needed to restart momentum.

The immediate macro focus is on US producer and consumer inflation data due Thursday and Friday, followed by next week’s Federal Reserve decision. Markets are already positioned for a more hawkish Fed and a likely rate increase, which leaves the balance of risk looking comparatively favorable for crypto.

Any softness in inflation, easing of geopolitical tensions or reversal in oil prices could lower yields and encourage US dollar outflows, providing a meaningful boost to digital assets and broader risk appetite.

Escalating conflict involving the US and Iran remains the primary external risk, particularly as the resulting rise in oil threatens to reinforce inflationary pressure.

Even so, Bitcoin has shown notable resilience against weaker equities, higher yields and elevated geopolitical uncertainty, reinforcing the sense that selling interest remains limited following the August advance.

Meanwhile, uncertainty surrounding the Clarity Act has become less of a market constraint. Investors increasingly see a path toward a supportive US regulatory framework even if Congress fails to act, with the SEC and other agencies prepared to advance crypto-friendly rules.

This creates an attractive asymmetry: limited additional downside if the legislation stalls, but potentially substantial upside if it progresses.

From a price perspective, the signals that the next leg is beginning would be Bitcoin clearing its May high and Ether establishing itself above $2,600.

Those breaks could open the door to a broader recovery toward breakeven for the year, with Bitcoin and Ether still down roughly 9% and 16%, respectively.