LMAX Group digital asset volumes have been improving as the week goes on. Total notional volume for Wednesday came in at $605 million.

Breaking it down per coin, bitcoin volume came in at $445 million. Ether volume came in at $95 million.

Looking at average position size over the past 30 days, we’re seeing average bitcoin position size at $8,901 and average position size for ether at $3,392.

Volatility has been cooling off in recent sessions. We’re looking at average daily ranges in bitcoin and ether of $2,098 and $81 respectively.

Digital assets remain under pressure into Thursday as a stronger US dollar, a hawkish Fed backdrop and higher oil prices encourage profit taking after the rally of recent weeks.

Bitcoin remains the clearest proxy for the adjustment, with Ether caught in the same retreat from risk. Renewed Middle East tensions and softer equities have added to the pressure, as investors weigh the implications of higher energy costs for inflation and interest rates.

The selling has also been exaggerated by the unwinding of leveraged positions, with some traders forced out as prices move lower.

We see this as a potentially healthy clearing of excess after a strong run, leaving the market better placed to recover if buyers once again step in to support the dip.

Meanwhile, the security debate following Justin Drake’s warning and Vitalik Buterin’s response has added another concern for investors, though its contribution to the selling remains unclear.

The discussion centers on what future AI advances could mean for wallet security, rather than evidence that ordinary wallets have been cracked. Vitalik has cautioned against rushed moves, and work to strengthen blockchain security is already underway. This is a development to monitor, rather than a reason to assume an attack is imminent.

Our broader view remains constructive. We believe much of the hawkish backdrop is already reflected in prices, leaving room for a more meaningful reversal in the dollar if incoming developments fail to justify further strength.

A softer dollar, particularly alongside easing yields, would help restore a more favourable backdrop for digital assets and allow the market to refocus on its own drivers.

For now, we see the setback as another opportunity for the market to demonstrate that demand is building at higher levels.

If buyers again absorb the dip, that would reinforce confidence in the recovery, embolden investors and potentially accelerate fresh demand ahead of the next sustained push higher.