LMAX Digital volumes were impressive yet again on Wednesday. Total notional volume for Wednesday came in at $418 million, 30% above 30-day average volume.

Bitcoin volume printed $250 million on Wednesday, 42% above 30-day average volume. Ether volume printed $121 million, 28% above 30-day average volume.

Looking at average position size over the past 30 days, we’re seeing average bitcoin position size at $7,170 and average position size for ether at 2,989.

Volatility is showing signs of picking back up in recent sessions after trading down to the lowest levels since earlier this year. We’re looking at average daily ranges in bitcoin and ether of $894 and $59 respectively.

It’s been a choppy week of trade for cryptocurrencies, though ultimately, into Thursday, we aren’t too far off where we started the week.

Indeed, bitcoin and ether have ultimately been weighed down from the news of the SEC lawsuits against Binance and Coinbase. But at the same time, the market has taken the news in stride.

Overall, there is a confidence that the industry will work through these setbacks and come out stronger on the other end. There has been plenty of pushback against the way in which the SEC has handled all of this and it is going to take many months to see how all of this is resolved.

Politics also play a major role here with respect to how crypto regulation will turn out, and with that said, a lot could change between now and the 2024 US election.

Ultimately, 2023 has been challenging, but even still, bitcoin and ether are up well over 50% YTD. As far as this latest pullback goes, we think it actually could have more to do with monetary policy than SEC lawsuits.

In global markets this week, there has been a clear message of ongoing hawkishness from central banks. This includes the RBA, Bank of Canada, ECB, and BOE. All of this points to a Federal Reserve that could also maintain a hawkish bias at the upcoming meeting.

What this is means is the potential for a fresh wave of risk off flow and lower US equities. As rates go up, valuations become less attractive. And as stocks come off, there could be fallout in crypto, with this correlation still having some effect.