LMAX Digital volumes improved from Monday but were still on the lighter side overall. Total notional volume for Tuesday came in at $185 million, 28% below 30-day average volume.

Bitcoin volume printed $82 million, 39% below 30-day average volume. Ether volume came in at $39 million, 17% below 30-day average volume.

Looking at average position size over the past 30 days, we’re seeing average bitcoin position size at $6,164 and average position size for ether at $1,022.

Volatility is consolidating off multi-month lows. We’re looking at average daily ranges in bitcoin and ether of $2,030 and $75 respectively.

Crypto assets continue to trade defensively, with Bitcoin and Ethereum struggling to gain traction as investors reassess the implications of a more hawkish Federal Reserve under Chair Warsh.

The sharp repricing in rate expectations since last week’s FOMC meeting has weighed on broader risk sentiment, with equities coming under renewed pressure and the US dollar extending its advance. For now, crypto remains caught in the crosscurrents of tighter financial conditions and weaker appetite for risk assets.

Our primary concern remains the growing anxiety around elevated equity valuations at a time when markets are preparing for the possibility of less investor-friendly monetary policy.

While the recent selloff in stocks has naturally spilled over into digital assets, we continue to believe the crypto market is uniquely positioned to eventually decouple. The challenge is that many investors still view crypto as simply another high-beta risk asset rather than recognizing its longer-term role as the underlying architecture of a new financial system.

At the same time, there is a compelling argument that crypto could ultimately emerge as a relative winner should equity markets experience a deeper correction.

Unlike stocks, which remain near historically elevated valuations, crypto assets have already endured substantial declines since their late-2025 peaks. This leaves room for investors to increasingly view digital assets as an attractive source of diversification and a potential destination for capital rotation if confidence in traditional asset classes begins to deteriorate.

Importantly, the market may also be overestimating how restrictive the new Fed ultimately becomes.

While Chair Warsh has adopted a more hawkish tone, monetary policy remains data dependent. With oil prices retreating from recent highs and some inflation pressures beginning to ease, the case for aggressive tightening may prove less compelling than current market pricing suggests. As a result, there is a credible scenario in which investors gradually conclude that the shift in Fed leadership represents less of a regime change and more of a continuation of the existing policy framework.

From a technical perspective, confirmation of a more constructive near-term outlook would come from Bitcoin reclaiming the 65,600 area and Ethereum pushing back above 1,780.

Such moves would help alleviate immediate downside pressure and reinforce the view that the market is beginning to look through macro headwinds. Until then, price action is likely to remain heavily influenced by developments in traditional markets, monetary policy expectations, and broader shifts in investor sentiment.