LMAX Digital volumes have been racing higher all week and finally crossed back above the $1 billion mark for the first time since mid-August. Total notional volume for Wednesday came in at $1.1 billion, 229% above 30-day average volume.

Bitcoin volume printed $688 million on Wednesday, 254% above 30-day average volume. Ether came in at $394 million, 241% above 30-day average volume.

Looking at average position size over the past 30 days, we’re seeing average bitcoin position size at $6,232 and average position size for ether at 2,666.

Volatility is finally showing signs of turning up from yearly and multi-month lows. We’re looking at average daily ranges in bitcoin and ether of $629 and $69 respectively.

This has been a good week for crypto assets. Not only have we been seeing a nice push higher in prices, the push has also been accompanied by a surge in volume. Volumes have been anemic in 2022 and the move back above $1 billion in total notional volume at LMAX Digital on Wednesday was extremely encouraging.

Fundamentally, there are a couple of things going on here. The primary driver of the renewed demand seems to be coming from a repricing of Fed expectations, with the market making some headway in trying to force the Fed into a pivot. We’ve also been seeing progress on the regulatory front and a willingness for more traditional market participants to want to get involved in crypto because of this.

At the same time, we’re not out of the woods just yet. Until we get confirmation from the Fed that it actually is willing to make some accommodative adjustments to monetary policy, or until we see inflation coming back down, risk remains that the Fed will continue to ignore the will of the market and keep with a higher for longer policy track. This would likely open renewed downside pressure on stocks and currencies, and weigh on crypto by extension.

Technically speaking, we did introduce the possibility of a major bottom in bitcoin, taking the form of a double bottom. The market would need to break back above the neckline at $25,200 to trigger such a bottom and open the door to a more legitimate recovery. Until then, the overall pressure remains on the downside.