LMAX Digital volumes were up big on Wednesday, putting in the strongest single day performance since May 2022. Total notional volume for Wednesday came in at $2.4 billion, 240% above 30-day average volume.

Bitcoin volume printed $2 billion on Wednesday, 264% above 30-day average volume. Ether volume came in at $269 million, 177% above 30-day average volume.

Average position continues to trend up over the past 30 days. We’re seeing average bitcoin position size at $17,195 and average position size for ether at $3,676.

Bitcoin and ether volatility have traded up to their highest levels since 2022. We’re looking at average daily ranges in bitcoin and ether of $1,666 and $104 respectively.

Wednesday was a wild day for the crypto market. We saw intense fallout on the back of a headline that ended up doing a lot more damage than it needed to.

On Wednesday, the release of a news story had the market thinking there was something official around the SEC denying applications for bitcoin spot ETFs in January.

While this may end up being the case, the news was simply based on the opinion of an individual who cited reasons for why the SEC could hold up the approvals.

Ultimately however, there has been no such official indication, and it still appears as though every effort is being made to push the process forward and get the approvals done.

Claims that the SEC could deny the bitcoin spot ETFs based on the political leanings of the parties involved are questionable in our view.

It would seem that at this point, denying the bitcoin spot ETF applications would seriously compromise the credibility of the SEC, while also leaving the regulator open to a legitimate legal challenge.

We wouldn’t rule out the possibility of further delay given how drawn out the process has been. But everything continues to point in the direction of the ETF approvals coming in the weeks ahead.

There are also other factors at play which could be contributing to the pullback. It’s possible the new crypto tax rule in the US, which requires the reporting of transactions over $10k, has turned some investors off.

It’s also possible this latest wave of broad based US Dollar demand and risk off flow to start 2024 is also having a weighing influence on crypto assets.

Technically speaking, there has been no change to the constructive outlook despite the sharp Wednesday retreat. At the moment, bitcoin is in a bullish consolidation. So long as the price holds above $40k, the short-term outlook remains bullish.