LMAX Digital volumes cooled off on Tuesday after a strong start to the week. Total notional volume for Tuesday came in at $373 million, 10% below 30-day average volume.

Bitcoin volume printed $224 million on Tuesday, 7% below 30-day average volume. Ether volume came in at $95 million, 27% below 30-day average volume.

Looking at average position size over the past 30 days, we’re seeing average bitcoin position size at $6,487 and average position size for ether at 2,454.

Volatility has been absent from the market for much of 2022 and is still trending down at yearly low levels. We’re looking at average daily ranges in bitcoin and ether of $920 and $103 respectively.

All of the focus for today will be on the Federal Reserve decision. Given where bitcoin is trading right now, there is risk for a good chunk of volatility in the aftermath of the event risk.

As we’ve been highlighting in out technical outlook this week, bitcoin is still very much confined to a downtrend and at risk for a bearish continuation.

Should we see a Fed that continues to deliver a communication that leans more hawkish than expected, it will likely lead to more downside pressure on the price of bitcoin, which could then open a drop to a fresh yearly low.

As far as where that drop could take us goes, a break below the yearly low would open a measured move downside extension targeting $10k.

We would fully expect such a drop to open just as much, if not more downside pressure on ETH, given ether’s higher sensitivity to risk.

If the Fed manages to deliver a rate decision that communicates a less hawkish, or even as expected outcome, this would likely inspire a wave of risk on flow in global markets and would help to bolster crypto assets as well.