Total notional volume at LMAX Digital cooled off in the previous week after an impressive run of volume this month. Total notional volume from last Monday through Friday came in at $5.7 billion, 25% lower than a week earlier.

Breaking it down per coin, bitcoin volume came in at $3.2 billion in the previous week, 37% lower than the week earlier. Ether volume came in at $1.5 billion, 8% lower than the week earlier.

Total notional volume over the past 30 days comes in at $25.9 billion.

Looking at average position size over the past 30 days, we’re seeing average bitcoin position size at $13,501 and average position size for ether at $4,281.

Market volatility is tracking at its highest levels for bitcoin since 2021 and ether since 2022. We’re looking at average daily ranges in bitcoin and ether of $3,602 and $213 respectively.

We had spent a lot of time in recent days warning of the risk for a healthy correction in bitcoin and other crypto assets on account of extreme overbought readings on the daily chart.

This correction has finally played out and with technical readings cooling back off into neutral territory, we suspect the market will be looking for that next higher low ahead of a bullish continuation.

Technically speaking, the uptrends in bitcoin and ether are firmly intact, supporting the case for a higher low. Fundamentally, the launch of the bitcoin ETFs, excitement around the upcoming halving event, and ramping up in activity in the defi space have all been supportive as well.

The other week, we talked about the fact that ether has yet to take out its record high from 2021, which could be another force that keeps the crypto market driving higher over the short-term.

As far as this week goes, the biggest risk to crypto could very well come from the global macro front. We have a Fed decision on Wednesday in which there is a growing worry the central bank could move to a less investor friendly policy outlook on account of stronger US data and hotter US inflation reads.

Indeed, correlations between crypto and traditional assets have been running low in 2024. At the same time, we suspect that any intense risk off flow on the back of a less investor friendly Fed decision, could very well spill over into crypto.