LMAX Digital volumes have been holding steady this week. Total notional volume for Wednesday came in at $623 million, just 1% below 30-day average volume.

Bitcoin volume printed $441 million on Wednesday, 6% above 30-day average volume. Ether volume printed $136 million on Wednesday, 4% below 30-day average volume.

Looking at average position size over the past 30 days, we’re seeing average bitcoin position size at $7,039 and average position size for ether at 2,584.

There have also been signs of a pickup in volatility in recent days. We’re now looking at average daily ranges in bitcoin and ether of $1,836 and $139 respectively.

Wednesday price action wasn’t all that encouraging for crypto markets. Bitcoin and ether were both trading sideways to lower on the day. All of this leaves these markets still very much confined to bearish consolidation with risk for more declines in the days ahead.

The fact that stocks tried to trade higher on Wednesday and we saw no signs of bitcoin or ether wanting to push up with stocks, was also a bearish sign. Correlations continue to show crypto tracking with stocks and the inability to bounce along with stocks points to relative weakness.

We’re also skeptical about the outlook for financial markets and believe there is danger in the Fed Chair communicating an overly optimistic message in his semi-annual testimony. The Fed Chair talked of a strong economy and a soft landing, all while evidence of rocketing inflation and rising rates points to anything but.

Finally, as we highlighted in Wednesday’s report, analysis of bitcoin wallets shows most holders still in profit overall despite recent setbacks. If we look back at previous bottoms in the price of bitcoin, wallets were on net out of the money, which suggests there is still more pain ahead.

Technically speaking, we believe there is risk for additional weakness down towards the $14,000 area before bitcoin finally starts to seriously consider the prospect for a bullish reversal and continuation of the longer-term uptrend.