Investors are repositioning ahead of Tuesday’s major bank earnings releases and Wednesday’s U.S. inflation report, with both events likely to shape near-term market direction.
South Korea’s KOSPI dropped 5.5% on Tuesday, extending its decline to approximately 38% below the record high it reached in June. Cryptocurrency markets also experienced sharp price fluctuations. Bitcoin (BTC) briefly fell beneath $81,000 before climbing above $84,000 and later trading just over $83,000. Ether (ETH) dropped to around $2,400 at its session low.
The decline in Asian equities reflected growing unease about the AI investment boom. Broadcom’s CEO compared current AI investing to casino gambling, raising doubts among investors, while reported technological advances by China’s CXMT in memory chips fueled concerns about stronger competition for established manufacturers.
Samsung Electronics (005930) lost 7%, while SK Hynix (00060) fell 10%, making them major contributors to the market downturn.
Attention is also turning to Wednesday’s U.S. Consumer Price Index (CPI) release, which could introduce another source of market volatility. Economists expect headline inflation to rise 3.6% year over year and core inflation to reach 2.5%. A headline figure in line with forecasts would represent an increase from the previous month’s 3.4%.
Meanwhile, quarterly earnings announcements are gathering pace. JPMorgan Chase (JPM), Goldman Sachs (GS) and Citigroup (C) are due to report results later Tuesday, offering investors updated information on consumer demand, credit quality and business activity.
Derivatives positioning
Futures activity is rising as leveraged positions are closed. Trading volume over the past 24 hours increased 66% to $212 billion, up from $126 billion a day earlier. Open interest (OI), representing the dollar value of outstanding contracts, declined 1.58% to $143.4 billion. Liquidations jumped 284% to $813 million. Rising turnover combined with declining OI and more forced closures suggests traders are unwinding leverage rather than building additional exposure.
Sellers have regained a slight advantage in aggressive trading. The 24-hour taker volume split now stands at 48% for buyers and 52% for sellers, reversing the previous day’s 52%-to-48% advantage for buyers. Taker volume measures transactions executed immediately at available market prices, providing a snapshot of which side is acting more aggressively. Buyers have moved closer to balance but remain slightly behind.
SPCX and SNDK are attracting the most trading activity among crypto-traded traditional-asset futures. CoinGlass data shows 24-hour volume has surged 700% for SPCX and 271% for SNDK. Despite the sharp increases, open interest in both contracts remains below $1 billion, far smaller than levels seen in major cryptocurrency markets. The activity points more toward rapid trading than a major accumulation of new positions.
SNDK positions are expanding even as its price declines. Open interest climbed nearly 9% while the price fell 7%. Since OI is measured in dollar terms, the price drop reduces its reported value. Adjusting for this effect indicates that the number of outstanding contracts rose by roughly 17%. The increase suggests traders are opening positions during the decline, potentially adding short exposure, although some may be betting on a recovery.
SK Hynix derivatives are also seeing a rise in positions during the selloff. Open interest increased 18% while the price dropped 8%, indicating that outstanding contracts grew approximately 28% after adjusting for the price decline. This activity suggests the risk aversion affecting South Korean equities is extending into blockchain-based derivatives markets.
Leverage continues to decline in Bitcoin and Ether futures. Open interest for both assets has fallen by at least 2% over the past 24 hours, while prices have remained mostly flat or moved lower. Some of the OI decline reflects lower dollar valuations, meaning the reduction in actual contracts is smaller than the reported percentage. Even so, traders are continuing to close positions. XRP, SOL and HYPE show similar patterns.
ZEC and NEAR are experiencing simultaneous price and open-interest declines. ZEC has lost more than 7% over 24 hours, while OI has fallen 11%. Once the impact of the lower price is considered, the number of outstanding contracts appears to have declined by about 4%. The previous day, a 7% rise in OI alongside a 6% price increase translated into only around 1% growth in contracts, making the latest reversal more substantial than the earlier buildup. NEAR has followed a similar trajectory.
Annualized funding rates for both ZEC and NEAR remain positive at approximately 7%. ZEC’s rate has eased from 10% a day earlier, meaning long traders are still paying short traders to maintain their positions. OI-adjusted cumulative volume delta (CVD), which measures whether aggressive buyers or sellers dominate, remains negative for both tokens.
SUI is leading the broader wave of aggressive selling. Its CVD is the most negative, reflecting strong selling pressure across major assets, including Bitcoin and Ether. NEAR has also reversed sharply after recording the second-most positive reading the previous day. Annualized perpetual funding rates have fallen to minus 30% or lower, indicating that short traders are paying long holders. Although this signals heavily bearish positioning, an overcrowded short trade can unwind rapidly if prices rise.
Options traders remain relatively composed despite the surge in liquidations. Bitcoin and Ether implied volatility indexes remain close to their year-to-date lows, suggesting options markets continue to price in limited near-term volatility. Implied volatility reflects traders’ expectations for future price movements.
Bitcoin options activity continues to favor downside protection. Put options have dominated the most actively traded BTC contracts for the second day in a row. Because puts generally gain value when Bitcoin falls, the elevated activity points to continued hedging against further declines. Ether options flows are more balanced, although the $2,500 put expiring Oct. 16 is the most actively traded contract by a wide margin.
Token developments
Starknet (STRK) fell more than 17% over the past 24 hours to roughly $0.08, giving back part of a recent rally that had nearly doubled its price. The earlier advance followed discussions about potentially leaving Ethereum and becoming an independent, quantum-resistant layer-1 network.
LayerZero (ZRO) declined 14%, reversing gains from its recent rally. STRK and ZRO were the biggest losers among the top 100 cryptocurrencies by market capitalization, while NEAR dropped 11%, showing that the retreat has spread beyond tokens that recently outperformed the market.
Blur (BLUR) plunged 33% after the NFT marketplace announced that it would close its website interface and stop matching new Blend loans beginning Nov. 12. Its underlying marketplace contracts will remain functional, and the token will continue to provide governance rights over the protocol’s fee switch.
Autheo (THEO) collapsed 92% following a suspected exploit on Base. PeckShield reported that an attacker unauthorizedly minted 19 million tokens, swapped them for 700 ETH valued at approximately $1.76 million, and transferred the proceeds across to Ethereum.
Stacks (STX) bucked the wider market weakness, advancing 11.4% as the network continued to expand its Bitcoin-staking program.
