LMAX Digital volumes continue to track on the lighter side in the thin summer trading conditions. Total notional volume for Tuesday came in at $135 million, 14% below 30-day average volume.

Bitcoin volume printed $67 million, 18% below 30-day average volume. Ether volume came in at $15 million, 46% below 30-day average volume.

Looking at average position size over the past 30 days, we’re seeing average bitcoin position size at $4,952 and average position size for ether at $1,766.

Volatility remains subdued and continues to track at multi-month lows. We’re looking at average daily ranges in bitcoin and ether of $1,327 and $52 respectively.

Crypto markets remain locked in the heart of the summer doldrums as holiday-thinned participation and declining volatility suppress activity.

Bitcoin volatility continues to sink to multi-month lows, while repeated attempts to break outside the recent range have lacked sufficient conviction.

Extended volatility contractions often precede substantial moves, and after the intense downside already absorbed by the market, the setup increasingly points to the early stages of a meaningful accumulation phase. Against this backdrop, we believe the next major breakout is more likely to develop to the topside.

This follows an extended period of deleveraging in which weaker projects have been washed out and speculative excess has been materially reduced.

The disconnect between subdued prices and continued institutional commitment remains notable. US spot bitcoin ETFs attracted more than $850 million last week, their strongest weekly inflow since April.

Development across tokenization, stablecoins and on-chain financial infrastructure also continues despite the difficult market backdrop. Pockets of renewed interest in NFTs, launch platforms and speculative tokens are worth watching as possible early indicators that risk appetite is beginning to return at the margins.

Regulation remains another constructive longer-term theme. Although the CLARITY Act has become caught in political gridlock, the SEC continues to advance its own crypto rulemaking agenda, including potential exemptions that would give qualifying token issuers clearer routes to raising capital.

The willingness of regulators to move forward in the absence of immediate congressional action reduces the risk that legislative delays completely stall US crypto development.

For today, attention turns to US CPI, which could provide the catalyst needed to break the market’s compression. A softer reading would encourage a more balanced Fed outlook, weigh on the dollar and Treasury yields, and improve the broader environment for crypto and other risk assets.

A hotter print could generate short-term pressure, but we believe much of the hawkish risk is already reflected in beaten-down valuations. Crypto’s declining sensitivity to day-to-day equity moves also suggests that any setback may prove relatively contained.