LMAX Digital volumes reversed course in a big way on Wednesday. After a very slow, sub-par start to the week, volumes came roaring back. Total notional volume came in at $1.9 billion, 47% above 30-day average volume.

Bitcoin volume shot up to $888 million, 33% above 30-day average volume, while ether volume came in at $479 million, 17% above 30-day average volume.

Looking at average position size over the past 30 days, we’re seeing average bitcoin position size at $14,495 and average position size for ether running up to $7,676.

Volatility has been slowly picking up since finding a bottom in July. We’re now looking at average daily ranges in bitcoin and ether of $2,962 and $224 respectively.

We had warned of potential downside pressure on crypto assets if US inflation data came in above forecast on Wednesday. And this is exactly how things played out, with both bitcoin and ether initially extending record gains, before reversing course in the aftermath of the US release.

Setbacks have however been relatively mild thus far, which we believe to be super impressive and a testament to commitment from medium and longer-term players who recognize crypto’s value proposition beyond being some asset class simply correlated to traditional market sentiment.

The reality is with US inflation running hot, it further highlights the benefit of diversifying into deflationary assets like bitcoin and even ether. The ability for crypto to hold up has also been impressive when considering the recent miss of Coinbase’s quarterly revenue.

Still, we do think it will be worth keeping an eye on US equities in the days ahead. If the setbacks in the stock market intensify, it will be hard for cryptocurrencies to avoid coming under pressure, even if still relatively outperforming against traditional assets.