LMAX Digital volumes have been on the decline this week, despite the push to record highs in bitcoin and ether. This warns of potential exhaustion and possible corrections ahead.

Total notional volume for Tuesday came in 10% below 30-day average volume, while bitcoin and ether volumes were off 15% and 43% respectively from 30-day average volumes.

Looking at average position size over the past 30 days, we’re seeing average bitcoin position size at $14,411 and average position size for ether running up to $7,581.

Volatility has been slowly picking up since finding a bottom in July. We’re now looking at average daily ranges in bitcoin and ether of $2,730 and $210 respectively.

At the moment, we’re focused on signs of technical extension suggesting the next big move for cryptocurrencies could be lower before higher again. In today’s animated chart overview, we highlight solid support in bitcoin around $60,000.

Fundamentally, it will be worth keeping on eye on today’s US CPI read. Anything that comes in on the hotter side of expectation could open a wave of risk liquidation in traditional markets that we believe would weigh on crypto over the short-term.

The rationale is that above forecast US inflation will put more pressure on the Fed to reconsider its overly accommodative policy stance, which will drive US yields higher and scare equity market investors.

And in the short-term, we do believe there are positive correlations between US equities and crypto.

Some positive headlines in the space include AMC saying it may create its own token, and speculation Elon Musk will rotate shares of Tesla into more cryptocurrency exposure.