Investors are adjusting their portfolios ahead of Tuesday’s U.S. bank earnings and Wednesday’s inflation report, both of which could influence financial markets.
South Korea’s KOSPI tumbled 5.5% on Tuesday, leaving the index about 38% below its June record peak. Cryptocurrency prices also swung sharply, with Bitcoin (BTC) dropping below $81,000 before rebounding past $84,000 and settling slightly above $83,000. Ether (ETH) briefly fell to $2,400.
The weakness in Asian equities reflected rising concerns about the AI investment boom. Broadcom’s CEO likened speculative AI investments to casino gambling, shaking investor confidence, while advances in memory-chip technology by China’s CXMT heightened fears of stronger competition for established semiconductor companies.
Samsung Electronics (005930) fell 7%, while SK Hynix (00060) declined 10%.
Investors are also watching Wednesday’s U.S. Consumer Price Index (CPI) report for further clues on inflation. Forecasts call for headline inflation of 3.6% year over year and core inflation of 2.5%. If the headline figure meets expectations, it would be higher than the previous month’s 3.4%.
Meanwhile, third-quarter earnings season is gaining momentum. JPMorgan Chase (JPM), Goldman Sachs (GS) and Citigroup (C) are scheduled to report Tuesday, providing insight into consumer spending, credit conditions and corporate activity.
Derivatives positioning
Futures volume is rising as traders unwind leverage. Trading volume over the past 24 hours climbed 66% to $212 billion from $126 billion the previous day. Open interest (OI), which measures the dollar value of outstanding contracts, slipped 1.58% to $143.4 billion, while liquidations surged 284% to $813 million. The combination of higher volume, falling OI and increased forced closures indicates that leveraged positions are being removed from the market.
Sellers have a slight edge in aggressive trading. The 24-hour taker buy/sell volume ratio shifted to 48% for buyers and 52% for sellers, reversing the previous day’s 52%-to-48% split in favor of buyers. Taker volume reflects trades executed immediately at available market prices, showing which side is more aggressive. Buyers have narrowed the gap but remain behind.
SPCX and SNDK are leading trading activity among traditional-asset futures on crypto platforms. CoinGlass data shows their 24-hour trading volumes increased 700% and 271%, respectively. However, open interest in both contracts remains below $1 billion, far smaller than in major cryptocurrency markets. The sharp increase in volume appears to reflect rapid trading rather than a substantial accumulation of positions.
SNDK open interest is growing despite a price decline. OI rose nearly 9% while the price dropped 7%. Because open interest is calculated in dollar terms, the lower price reduces its reported value. After adjusting for this effect, outstanding contracts increased by roughly 17%. This suggests fresh positions are entering a falling market, potentially indicating new short bets, although some traders may be buying at lower prices.
SK Hynix derivatives are also attracting new positions as shares fall. Open interest increased 18% while the price declined 8%, implying that the number of outstanding contracts rose by approximately 28%. The activity suggests that the risk aversion affecting South Korean equities is extending into on-chain derivatives markets.
Bitcoin and Ether futures continue to lose leverage. Open interest in both cryptocurrencies has declined by at least 2% over the past 24 hours, while prices have remained mostly flat or moved lower. Some of the reported OI decline reflects falling prices, so the reduction in actual contract numbers is smaller. Nevertheless, positions are still being closed. XRP, SOL and HYPE have experienced similar trends.
ZEC and NEAR are seeing declines in both price and open interest. ZEC has fallen more than 7% in 24 hours, while OI dropped 11%. After accounting for the price decline, the number of outstanding contracts appears to have decreased by about 4%. A day earlier, OI had risen 7% alongside a 6% price gain, representing only about 1% growth in contracts. The latest reversal is therefore more pronounced than the previous buildup. NEAR shows a similar pattern.
Annualized funding rates for ZEC and NEAR remain positive at around 7%, with ZEC down from 10% the previous day. Positive funding means long traders pay short traders to maintain their positions. OI-adjusted cumulative volume delta (CVD), which tracks whether aggressive buyers or sellers dominate, remains negative for both tokens.
SUI is seeing the strongest aggressive selling pressure. Its CVD is the most negative, reflecting weakness across major cryptocurrencies, including Bitcoin and Ether. NEAR has also reversed after posting the second-most positive reading the previous day. Annualized perpetual funding rates have fallen to minus 30% or lower, meaning short traders are paying long holders. This points to heavily bearish positioning, although crowded short positions can unwind quickly if prices rise.
Options markets remain calm despite the liquidation surge. Bitcoin and Ether implied volatility indexes are hovering near their year-to-date lows, suggesting traders are not pricing in a major increase in volatility. Implied volatility measures the options market’s expectations for future price swings.
Bitcoin traders continue to seek downside protection. Put options have dominated the most actively traded BTC contracts for a second consecutive day. Since put options generally gain value when Bitcoin prices fall, the activity suggests investors are hedging against further losses. Ether options flows are more mixed, but the $2,500 put expiring Oct. 16 leads trading by a wide margin.
Token developments
Starknet (STRK) lost more than 17% over the past 24 hours, falling to approximately $0.08 and reversing part of a recent rally that had nearly doubled its value. The earlier gains followed discussions about the network potentially leaving Ethereum to become an independent, quantum-resistant layer-1 blockchain.
LayerZero (ZRO) declined 14%, surrendering much of its recent advance. STRK and ZRO were the two worst-performing tokens among the top 100 cryptocurrencies by market capitalization, while NEAR fell 11%, indicating that the pullback has spread beyond recent market leaders.
Blur (BLUR) dropped 33% after the NFT marketplace announced plans to shut down its website interface and stop matching new Blend loans on Nov. 12. Its underlying marketplace contracts will remain operational, and the token will continue to carry governance rights over the protocol’s fee switch.
Autheo (THEO) plunged 92% following a suspected exploit on Base. According to PeckShield, an attacker minted 19 million tokens without authorization, exchanged them for 700 ETH worth approximately $1.76 million, and bridged the funds to Ethereum.
Stacks (STX) moved against the broader market downturn, gaining 11.4% as the network continued expanding its Bitcoin-staking program.
