LMAX Digital volumes put in a nice rebound on Wednesday. Total notional volume for Wednesday came in at $1.2 billion, 26% above 30-day average volume.

Bitcoin volume printed $692 million on Wednesday, 26% above 30-day average volume. Ether volume came in at $168 million, 31% above 30-day average volume.

Looking at average position size over the past 30 days, we’re seeing average bitcoin position size at $13,069 and average position size for ether at $2,744.

As far as volatility goes, we’re looking at average daily ranges in bitcoin and ether of $4,037 and $202 respectively.

The crypto market has already been on pins and needles around the possibility for a correction following the record run in the price of bitcoin through $100,000. So it wasn’t going to take much to at least rock the boat a little.

On Wednesday, we got that catalyst from the world of traditional markets, and more specifically, from the Fed policy decision.

Crypto assets have done a good job steering away from correlations with traditional markets in recent months. But fallout from Wednesday’s Fed decision was simply too much to ignore.

In the end, we don’t believe such fallout will carry any meaningful impact on the medium and longer-term outlook, though short-term it makes sense to see the latest bout of selling.

Risk markets have been excited about the prospect for 4 rate cuts from the Fed in 2025. But on Wednesday, the Fed dot plot revealed central bankers cutting that in half to an expectation of only 2 rate cuts in 2025.

And so, markets were faced with a wave of risk off flow and a concurrent wave of broad based US Dollar demand as yield differentials moved further in the Buck’s favor.

Given that crypto is still considered to be a maturing, emerging asset class, it was vulnerable to the intense wave of risk off flow.

Moreover, the fact that we also saw the US Dollar surge higher was yet another driver as currencies sold off across the board.

Technically speaking, dips continue to be well supported and bitcoin remains confined to a very well defined uptrend, with room for the current upside extension to run towards the next measured move extension target just over $120,000.