Bitcoin, Ether Swing Lower and Rebound as South Korean Stocks Extend AI-Fueled Decline

Investors are positioning for a busy period of market-moving events, with major U.S. banks scheduled to report quarterly earnings on Tuesday and the latest inflation data due Wednesday.

South Korea’s KOSPI tumbled 5.5% on Tuesday, leaving the benchmark around 38% below its June record high. Crypto markets also experienced significant price swings. Bitcoin (BTC) fell below $81,000 before recovering above $84,000 and settling slightly above $83,000, while Ether (ETH) briefly dropped to $2,400.

The selloff in Asian equities reflected growing uncertainty surrounding AI investments. Broadcom’s CEO likened speculative spending on AI to casino gambling, unsettling investors. At the same time, reported progress by Chinese memory-chip producer CXMT heightened concerns that established semiconductor manufacturers could face tougher competition.

Samsung Electronics (005930) shares declined 7%, while SK Hynix (00060) fell 10%.

Attention is also focused on Wednesday’s U.S. Consumer Price Index (CPI) report. Headline inflation is forecast to reach 3.6% annually, while core inflation is expected to come in at 2.5%. A headline reading in line with expectations would mark an increase from the previous month’s 3.4%.

Meanwhile, third-quarter earnings announcements are picking up pace. JPMorgan Chase (JPM), Goldman Sachs (GS) and Citigroup (C) are scheduled to release their results later Tuesday, offering fresh information about consumer spending, credit conditions and corporate activity.

Derivatives positioning

Futures volume is climbing as leveraged traders exit positions. Trading volume over the past 24 hours increased 66% to $212 billion from $126 billion the previous day. Open interest (OI), which measures the dollar value of outstanding contracts, declined 1.58% to $143.4 billion, while liquidations surged 284% to $813 million. Rising volume alongside falling OI and increased forced closures suggests traders are reducing leverage rather than adding exposure.

Sellers have a narrow lead 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% advantage for buyers. Taker volume tracks trades executed immediately at available market prices, indicating which side is more aggressive. Buyers have moved closer to balance but remain slightly behind.

SPCX and SNDK are attracting the most trading activity among traditional-asset futures listed on crypto platforms. CoinGlass data shows their 24-hour volumes jumped 700% and 271%, respectively. Open interest in both contracts remains below $1 billion, considerably smaller than that of major cryptocurrency markets. The surge appears to reflect rapid turnover rather than a substantial accumulation of new positions.

SNDK open interest is expanding even as its price falls. OI rose nearly 9% while the contract price dropped 7%. Since open interest is measured in dollar terms, the price decline reduces its reported value. Adjusting for that effect suggests outstanding contracts increased by approximately 17%. This points to fresh positions entering a weakening market, potentially reflecting new shorts, although some traders may be buying the dip.

SK Hynix derivatives are also seeing increased positioning during the selloff. Open interest climbed 18% as the price declined 8%, implying that outstanding contracts increased by roughly 28% after accounting for the price movement. This suggests the risk-off sentiment affecting South Korean equities is also visible in on-chain derivatives trading.

Bitcoin and Ether futures continue to shed leverage. Open interest in both cryptocurrencies has declined by at least 2% over 24 hours, even as prices remain broadly flat or move lower. Falling prices account for part of the reduction in dollar-denominated OI, so the actual decline in contract numbers is smaller. Nevertheless, positions are still being withdrawn. XRP, SOL and HYPE have shown similar trends.

ZEC and NEAR are experiencing falling prices alongside declining open interest. ZEC has lost more than 7% over 24 hours, while OI has dropped 11%. After adjusting for the price decline, the number of outstanding contracts appears to have fallen around 4%. A day earlier, OI had increased 7% alongside a 6% price gain, implying only about 1% growth in contracts. The latest reversal is more pronounced than the previous buildup. NEAR is following a similar pattern.

Annualized funding rates for both ZEC and NEAR remain positive at around 7%, with ZEC’s rate 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 the balance between aggressive buying and selling, remains negative for both tokens.

SUI is leading aggressive selling across the market. It has the most negative CVD reading, reflecting strong selling pressure across major cryptocurrencies, including Bitcoin and Ether. NEAR has also reversed after recording the second-most positive reading the previous day. Annualized perpetual funding rates have dropped to minus 30% or lower, meaning short traders are paying long holders. This signals heavy bearish positioning, although crowded shorts can be vulnerable to a sharp reversal if prices rise.

Options markets remain relatively calm despite widespread liquidations. Bitcoin and Ether implied volatility indexes are hovering near their year-to-date lows, indicating that options traders are not pricing in a major increase in expected price swings.

Bitcoin options traders continue to favor downside protection. Put options have dominated the most actively traded BTC contracts for a second consecutive day. Because puts generally gain value when Bitcoin prices decline, the activity suggests continued hedging against further losses. Ether options flows are more mixed, although the $2,500 put expiring Oct. 16 is the most actively traded contract by a substantial margin.

Token developments

Starknet (STRK) declined more than 17% over the past 24 hours to around $0.08, reversing part of a recent rally that had nearly doubled its price. The earlier advance came as the network considered moving away from Ethereum to become an independent, quantum-resistant layer-1 blockchain.

LayerZero (ZRO) fell 14%, giving back gains from its recent rally. STRK and ZRO were the two weakest performers among the top 100 cryptocurrencies by market capitalization, while NEAR declined 11%, showing that the pullback extends beyond recent outperformers.

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 retain governance rights over the protocol’s fee switch.

Autheo (THEO) plunged 92% following a suspected exploit on Base. PeckShield reported that an attacker minted 19 million tokens without authorization, exchanged them for 700 ETH worth approximately $1.76 million, and bridged the proceeds to Ethereum.

Stacks (STX) moved higher against the broader market decline, gaining 11.4% as the network continued expanding its Bitcoin-staking program.