LMAX Digital volume has been impressive this week and is picking up as the week pushes on. Total notional volume for Tuesday came in at $1.8 billion, 51% above 30-day average volume.

Bitcoin volume printed $765 million on Tuesday, 51% above 30-day average volume. Ether volume skyrocketed to $725 million, 104% above 30-day average volume.

Looking at average position size over the past 30 days, we’re seeing average bitcoin position size at $12,600 and average position size for ether running up to $9,236.

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 $2,838 and $276 respectively.

At the moment, the driving force behind crypto moves is coming from the macro front. We think it will be important to keep an eye on US equities for a clearer indication of where things might be headed over the short-term.

There has been a lot of nervous tension around the coronavirus in light of this latest variant, and should the market determine the outlook is more shaky, we could see this translate into a mass risk liquidation that extends into crypto assets as well.

Of course, we’ve also heard from the Fed Chair, who has finally conceded on the subject of inflation, after saying it was time to drop the ‘transitory’ term and redefine inflation. This could translate to less investor friendly policy, which will weigh on risk assets.

Evidence of some nervous tension in crypto markets comes from Glassnode data showing an uptick in bitcoin inflows into centralized exchanges, often indicative of pending liquidations. We’ve also seen bitcoin’s six-month put-call skew turning positive for the first time since the crash back in May.

It’s important to remember that as much as there is a compelling argument for bitcoin’s value proposition as a hedge in risk off backdrops, on a short-term basis, there are still correlations with risk sentiment, given that bitcoin has benefited as an alternative investment in risk on market conditions.

Of course, when it comes to the other cryptocurrencies, there should be an even stronger correlation with global risk sentiment, which would arguably expose ether to more downside risk in the event of an intensified decline in US stocks.

On a positive note, crypto does have seasonality on its side heading into December. Let’s see how it plays out.