LMAX Digital volumes got off to a great start to the week. Total notional volume for Monday came in at $506 million, 113% above 30-day average volume.

Bitcoin volume printed $271 million on Monday, 107% above 30-day average volume. Ether volume came in at $144 million, 152% above 30-day average volume.

Looking at average position size over the past 30 days, we’re seeing average bitcoin position size at $4,500 and average position size for ether at 2,149.

Volatility is finally showing signs of turning up from multi-month lows. We’re looking at average daily ranges in bitcoin and ether of $538 and $53 respectively.

There is a sense the crypto market has finally moved past the worst of the crypto implosions of 2022. We’ve already seen an impressive recovery in January, with ether and bitcoin up around 30% and 28% respectively.

A lot of the run has also been attributed to more favorable conditions in traditional markets with US inflation seen peaking, China opening back up, and the Eurozone expected to avoid a winter recession.

And yet, there remains good reason to proceed with caution, especially over the coming sessions. Fundamentally, we don’t believe we’re out of the woods with respect to fallout in crypto and still need more time to feel good about that.

At the same time, we are also cautious on all of this upbeat sentiment with respect to the global economic outlook. Ultimately, we’re not convinced inflation has peaked and any signs that would confirm this suspicion would likely weigh heavily on risk assets.

Perhaps most importantly, and especially over the coming days, is the fact that technically speaking, the recent run higher in crypto prices has resulted in severely overbought technical readings.

This warns that at a minimum, additional upside should be limited for a while to allow for these extended readings to unwind from extreme levels.