LMAX Digital volumes are coming back in an impressive way and were up big on Wednesday. Total notional volume for Wednesday came in at $314 million, 78% above 30-day average volume.

Bitcoin volume printed $156 million on Wednesday, 44% above 30-day average volume. Ether came in at $78 million, 107% above 30-day average volume.

Looking at average position size over the past 30 days, we’re seeing average bitcoin position size at $4,310 and average position size for ether at 1731.

Volatility is still suppressed at multi-month lows. We’re looking at average daily ranges in bitcoin and ether of $307 and $36 respectively. At the same time, this could be a warning sign of a major surge in volatility ahead.

While there continues to be plenty of concerns with respect to the short-term outlook for the crypto market, it’s also clear that many market participants are looking past the short-term, excited to build exposure at perceived attractive valuations.

We’ve seen a nice amount of demand this week despite some worrying headlines around Digital Currency Group, and despite seasonality studies that show January as a difficult month for the space.

As we’ve highlighted many times, and as per our technical analysis in this report, we believe there is still risk for one more healthy drop in 2023, before the market finally looks to establish that next meaningful base ahead of the next run to fresh record highs.

How regulators respond will be critical and how the market shows that it’s learned from the mistakes of the 2022 implosions will also be important.

Yet institutional demand has persisted and we are getting closer and closer to a heavy wave of mainstream institutional adoption which ultimately, should really help to drive the asset class to the next level.