LMAX Digital volumes improved from a lighter Monday performance. Total notional volume for Tuesday came in at $574 million.

Breaking it down per coin, bitcoin volume came in at $483 million. Ether volume came in at $44 million.

Looking at average position size over the past 30 days, we’re seeing average bitcoin position size at $8,960 and average position size for ether at $3,380.

Volatility has been cooling off in recent sessions following a sharp uptick. We’re looking at average daily ranges in bitcoin and ether of $2,106 and $81 respectively.

Digital asset markets are seeing a welcome bout of short-term profit taking on Wednesday, with bitcoin and ETH pausing following their recent recovery. Short term is the key distinction here: we see this pullback as healthy consolidation within an increasingly constructive outlook.

It allows stretched technical studies to normalize and gives the market another opportunity to demonstrate the strength of underlying demand.

The next test is whether setbacks attract solid buying support over the coming sessions. Bitcoin remains our primary gauge of broader sentiment, while sustained support for ETH would reinforce confidence in the recovery across the asset class.

Both have been working their way back towards breakeven on the year, which we see as the next major objective. Reclaiming that ground could strengthen conviction and draw fresh demand, with late last year’s record highs still leaving substantial room for further upside.

Today’s main macro focus is the Fed minutes, though these predate the latest employment report and subsequent softer US data. Any hawkish language therefore describes an earlier policy debate and needs to be assessed against the more recent evidence supporting patience.

Investors will look for divisions over further tightening and signs that officials were already open to giving previous policy moves more time to work.

Our view remains that much of the Fed’s hawkish message is already reflected in the dollar and US yields, even as expectations for an immediate hike have diminished. That leaves the greater risk in a sell-the-fact response, with profit taking on dollar longs and a pullback in yields.

Anything less hawkish than anticipated could accelerate that adjustment, easing a major constraint on bitcoin, ETH and broader risk appetite.

We continue to favor further upside, with a well-supported dip offering confirmation that this recovery has the strength to extend.