LMAX Digital volume picked up nicely on Wednesday. Total notional volume for Wednesday came in at $762 million, 17% above 30-day average volume.

Bitcoin volume printed $440 million on Wednesday, 27% above 30-day average volume. Ether volume came in at $226 million, 3% below 30-day average volume.

Looking at average position size over the past 30 days, we’re seeing average bitcoin position size at $7,912 and average position size for ether at 5,959.

Volatility has been trending lower into 2022. We’re now looking at average daily ranges in bitcoin and ether of $2,147 and $217 respectively.

Bitcoin and ether have managed to extend recent recoveries, with the latest round of gains coming from reaction to US inflation data. On Tuesday, the Fed Chair helped to jolt risk assets on his less hawkish speak, and this was followed up on Wednesday with a US CPI print that investors were relieved to see did not exceed expectations.

Still, the fundamentals should be concerning to investors and we worry this week’s risk on reactions will not be able to carry much more. We think the Fed Chair was simply inclined to say what was needed to ensure his re-nomination. But ultimately, the market should be paying more attention to recent official Fed communications that have been pointing to a more aggressive shift in policy.

It’s also clear the market was pricing for a high CPI print. So the fact that the actual number was able to match this expectation was impressive. The reality is that inflation is at multi-decade highs and running out of control, something the Fed is going to need to address.

Technically speaking, these runs higher that we’ve seen in bitcoin and ether are nothing more than minor corrections at this stage, with the daily charts still favouring the downside. As highlighted in the technical overview above, bitcoin will need to get back above the late December peak to suggest we’re finally ready to start heading higher again.