We’re getting set to close out the month of September and despite some bearish price action, volumes have been robust. Total notional volume at LMAX Digital is on pace to close out the month around $40 billion. This will be the highest monthly volume since the record volume seen back in May.

As far as Wednesday’s volumes are concerned, we did see a lighter day. Total notional volume for Wednesday was off 27%, bitcoin volume was off 22%, and ether volume was off 37%. But we see this as more of an anomaly, with the reduction in volume easily attributable to a very quite, tight range day.

Average position sizes over the past 30 days come in at $9,045 for bitcoin and $4,705 for ether.

Bullish momentum in the crypto space has stalled out since the market ascended to record highs back in April. Price action in September was bearish overall, and technically speaking, as per above, bitcoin’s topside failure above $50,000 could set the stage for deeper setbacks within this broader consolidation.

We anticipate weakness in bitcoin will translate to weakness across other cryptocurrencies. But at the same time, we still see all of this weakness as weakness within a bigger consolidation, with setbacks expected to be very well supported by institutional demand and committed early adopters.

Fundamentally speaking, there have been a number of developments that have been weighing on crypto assets in recent weeks. These include crypto specific headlines around regulatory uncertainty in the US and China, and macro fallout from an anticipated shift in monetary policy at the Federal Reserve.

Looking ahead to Q4 performance, we believe the biggest risk to crypto is the risk that we see a more severe shakeup in traditional risk assets. While bitcoin is expected to fully mature into a store of value in the years ahead, at the moment, many market participants still consider crypto to be an emerging market, which makes it somewhat vulnerable to periods of risk off, at least for now.