Investors are preparing for today's bank financial reports and Wednesday's U.S. inflation data.

After falling below $81,000, Bitcoin rebounded to above $84,000 before closing above $83,000. On Tuesday, South Korea's benchmark stock market index fell by 5.5%, about 38% lower than its historical high set in June. Affected by concerns over artificial intelligence investments and competition in the Chinese chip industry, Asian markets also experienced significant volatility. Ethereum once dropped to $2,400.

The selling pressure in Asia reflects an increasing concern in the market regarding AI transactions. The CEO of Broadcom described current AI investments as 'like a casino,' which has undermined investor confidence; meanwhile, reports on the progress made by Chinese company ChangXin Memory in storage chip technology have also sparked concerns that mature chip manufacturers are facing greater competition.

Samsung Electronics (005930) and SK Hynix (000660) led the decline, falling by 7% and 10% respectively.

Investors are also preparing for the US CPI report on Wednesday, which could become another source of volatility. The market expects overall inflation to be 3.6% year-on-year, with core inflation at 2.5%. If the overall inflation figure meets expectations, it would mean a further acceleration from 3.4% last month.

Meanwhile, the third-quarter financial reporting season is accelerating. JPMorgan Chase ( JPM ), Goldman Sachs ( GS ), and Citibank are scheduled to release their results later today, providing new insights into consumer demand, credit conditions, and corporate activities.

Derivative positions

Traders are being forced to exit their positions, rather than increasing their holdings: 24-hour futures trading volume reached $212 billion, a 66% increase from yesterday's $126 billion. The value of open contracts (i.e., the total dollar value of all open contracts) is $143.4 billion, a decrease of 1.58%. Clearing amounts have increased by 284% to $813 million. High trading volumes, declining OI, and forced liquidations indicate that leverage is being reduced, rather than increased.

In aggressive trading, sellers still hold a slight advantage: the 24-hour active trading volume ratio between bulls and bears is 48%/52%, which represents a reversal from yesterday; yesterday, bulls accounted for 52% of the trading volume. Active trading volume refers to transactions where traders are willing to pay a higher price to close a deal immediately, thus reflecting who is more eager to complete the transaction. Buyers have come close to balancing the situation, but have not yet taken control.

SPCX and SNDK are the most active futures contracts in the crypto market, although their scale is still relatively small: they were the most actively traded contracts over the past 24 hours. According to Coinglass data, the 24-hour trading volume of SPCX increased by 700%, while that of SNDK increased by 271%. The OI of both is still slightly below $1 billion, which is significantly less than that of mainstream contracts. The surge in trading volume is mainly due to rapid transactions, rather than the accumulation of positions.

The OI of SNDK rises during price declines: The OI increases by nearly 9% while prices fall by 7%. Since OI is denominated in US dollars, the lower prices themselves will reduce its value, so the number of open contracts actually increased by about 17%. This indicates that there is new capital flowing into the declining market, which usually represents new short sellers, but it may also include buyers looking to buy at lower prices.

SK Hynix is also another traditional financial-related trading asset: OI rose by 18%, while the price fell by 8%, resulting in an actual increase of about 28% in open contracts. The sentiment of decreased risk appetite in the South Korean stock market is quite evident in the blockchain market.

Leverage on Bitcoin and Ethereum futures continues to decline: The OI for both has dropped by 2% or more, despite the prices remaining relatively stable or slightly lower in the past 24 hours. Part of this decline is due to the falling prices, so the net outflow of positions is less than 2%, but it still represents an outflow. The same applies to XRP, SOL, and HYPE.

The OI of ZEC and NEAR also decline with the price drop: The price of ZEC fell by more than 7% within 24 hours, and OI decreased by 11%, which means that the number of open contracts has only decreased by about 4%. A day ago, OI rose by 7% accompanied by a 6% increase in price, indicating that the net capital inflow was only about 1%. Therefore, the current reversal amplitude is greater than the previous position-building amplitude. NEAR shows a similar pattern. Both still have a positive annualized capital rate of about 7%, which is lower than yesterday's ZEC rate of 10%, so the bulls are still paying for their positions. The cumulative trading volume difference adjusted according to OI (used to measure whether buyers or sellers are dominant) is negative for both.

SUI Sellers are dominating the market: The CVD of SUI is the most negative, leading the decline among most mainstream cryptocurrencies, including Bitcoin and Ethereum. Yesterday's second-strongest NEAR has now turned negative. There is a wide range of active selling orders. The annualized funding rate for perpetual contracts is negative 30% or even lower, which means that shorts are paying premiums to longs. Once prices rise, the crowded short position could quickly reverse.

Option traders are not panicked by liquidations: The implied volatility indices for Bitcoin and Ethereum remain near their year lows, indicating that the market continues to remain calm. Implied volatility is the option market's expectation of future price fluctuations.

Traders continue to buy Bitcoin for downside protection: In the BTC options, put options, which have been the most active in the past 24 hours, have dominated for a second consecutive day. Put options appreciate when Bitcoin prices fall, so a large volume of put option trades indicates an increase in hedging demand. On the Ethereum front, the flow of funds is more mixed, but the most active option is the one with an expiration date of October 16th and an exercise price of $2,500, which has seen a very large trading volume, far exceeding that of the second and third largest positions.

Token Dynamics

Starknet ( STRK ) has fallen by more than 17% in the past 24 hours to $0.08, giving back some of the nearly doubling increase seen recently. The previous rise was due to the network considering breaking away from Ethereum to become an independent, quantum-resistant layer-1 network.

LayerZero ( ZRO ) also gave back some of their recent gains, falling by 14%. STRK and ZRO were the two cryptocurrencies with the largest declines among the top 100 by market capitalization, while NEAR fell by 11%, indicating that the correction has spread beyond the assets that have performed stronger recently.

Blur ( BLUR ) fell by 33%. Previously, the NFT market announced plans to shut down its website interface on November 12th and cease matching new Blend loans. Its underlying market contracts will continue to operate, and the tokens will still retain governance over the protocol fee switch.

Autheo ( THEO ) tumbled 92% after allegedly being exploited for a vulnerability on Base. According to PeckShield, attackers unauthorizedly minted 19 million tokens, exchanged them for 700 ETH, worth approximately $1.76 million, and then transferred the funds to Ethereum.

Stacks ( STX ) rose by 11.4%, moving against the trend. The backdrop for this increase is that the network has expanded its Bitcoin staking program.