Bitcoin and Ether Slide, Then Rebound as South Korean Shares Fall on AI Concerns

Investors are positioning ahead of today's bank earnings reports and Wednesday's US inflation data.

Bitcoin fell below $81,000 and rose above $83,000.

South Korea's stock index, led by Samsung Electronics and SK Hynix, fell 5.5 percent as worries about AI investment and Chinese chip competition roiled Asian markets.

Investors are ahead of Wednesday's US inflation report and today's main bank earnings, while several tokens suffered double-digit losses and Autheo plunged 92% after a suspected hack.

South Korea's stock index fell 5.5 percent on Tuesday, down nearly 38 percent from its June all-time high. Crypto also saw sharp volatility, with BTC $83,696.96 falling below $81,000 before reaching above $84,000 and settling just above $83,000. Ether dropped $2,491.87 to $2,400.

The Asian sell-off reflects growing concerns about AI trading. Broadcom's CEO called current AI investment "casino-like," eroding investor confidence, and reported advances in memory chip technology at China's CXMT raised concerns about stronger competition for established chipmakers.

Samsung Electronics (005930) and SK Hynix (00060) fell 7% and 10%, respectively.

Investors are also taking positions ahead of Wednesday's US CPI report, another potential source of volatility. The total annual inflation is 3.6% and the main inflation is 2.5%. A headline reading in line with that forecast showed an acceleration from 3.4% in the previous month.

Meanwhile, third-quarter earnings season is gathering pace, with JPMorgan Chase ( JPM ) , Goldman Sachs ( GS ) and Citigroup ( C ) scheduled to report later today, offering fresh assessments of consumer demand, credit conditions and corporate activity.

Traders are forced out, not piled in: 24-hour futures volume is $212 billion, up 66% from yesterday's $126 billion. Open interest (OI), the dollar value of all open contracts, is $143.4 billion, down 1.58%. Liquidation reached 813 million dollars with an increase of 284%. Heavy trading, declining OI and forced closes mean leverage is being drained, not added.

Sellers still have a slight edge in aggressive trades: the 24-hour long buyer volume ratio is 48% to 52%, a change from yesterday when long trades accounted for 52% of the flow. Receiver volume counts trades where someone pays to be filled immediately, so it shows who is more eager. Buyers are closer to equality, but not in control.

SPCX and SNDK are the busiest cryptocurrency futures, although they are small: they have traded the most in the last 24 hours. According to Coinglass, 24-hour volume increased by 700% on SPCX and 271% on SNDK. OI on both is still less than $1 billion, which is significantly less than the majors. Increasing volume is mostly quick trades, not position building.

SNDK OI rises as price drops: OI rose nearly 9% alongside a 7% price drop. Because OI is calculated in dollars, the lower price lowers it, so open contracts rose almost 17%. This is a net flow of new positions into a falling market, which usually means fresh shorts, although some may be steep buyers.

SK Hynix is another TradFi play: OI is up 18% on an 8% price drop, so open contracts are up about 28%. The risk situation in South Korean stocks is clearly reflected in the chain markets.

Leverage continues to weigh on Bitcoin and Ether: OI is down 2% or more in both, even as prices are largely flat to negative over the 24-hour period. Part of the decline is simply the lower price, so the net exit of positions is less than 2%, but still an exit. The same is true for XRP, SOL and HYPE.

ZEC and NEAR OI are falling along with their prices: ZEC price is down more than 7% in 24 hours and OI is down 11%, showing only about 4% less open contracts. A day ago, a 7% increase in OI with a 6% price increase meant only a 1% entry, so the pullback is bigger than the build. NEAR shows a similar pattern. Annual funding rates for both are still positive at around 7%, up from 10% for ZEC yesterday, so longs will pay to stay in. OI's Adjusted Cumulative Volume Delta (CVD), which examines whether aggressive buyers or dominant sellers, is negative for both.

SUI sellers lead the market: SUI has the highest negative CVD, leading most majors including Bitcoin and Ether. NEAR, which had the second positive rating yesterday, has changed. Aggressive sales are widespread. Permanent financing rates are minus 30% or more per annum. This means that shorts cost a lot. A crowded short side can quickly reverse if prices rise.

Options traders are unfazed by the liquidations: Bitcoin and Ether implied volatility indicators are holding steady near year-to-date lows, pointing to continued market calm. The implied volatility of the options market is the prediction of price fluctuations in the future.

Traders continue to buy bearish protection in Bitcoin: Put options dominate the 24-hour most traded Bitcoin rankings for a second day. When the price of Bitcoin falls, the selling value increases, so the heavy investment volume points to hedging. For Ether, flows are mixed, although the leader is $2,500, which expires on October 16, with plenty of volume leaving the second and third major positions well behind.

Starknet STRK $0.08739 is down more than 17% in the past 24 hours to $0.08, reversing part of a recent rally that saw it nearly double in value. This increase comes as the network is working to make Ethereum an autonomous and quantum-resistant Layer 1.

LayerZero ZRO $2.0840 has also reversed its recent rally and lost 14%. STRK and ZRO are the two biggest losers among the top 100 cryptocurrencies by market capitalization, while NEAR fell 11%, indicating that the pullback is beyond recent top performers.

Blur ( BLUR ) is down 33% after NFT announced plans to close its website interface and stop matching new Blend loans on November 12.

Autheo (THEO) after a 92% drop suspected abuse in Base. According to PeckShield, an attacker minted 19 million tokens without permission, traded them for 700 ETH worth about $1.76 million, and connected the proceeds to Ethereum.

Stacks STX was down 11.4% at $0.4265. The move comes as the network expands its Bitcoin equity program.