From CoinDesk · By James Van Straten, Omkar Godbole, Francisco Rodrigues
Bitcoin fell below $81,000 before recovering to above $83,000.
South Korea’s equity benchmark plunged 5.5%, led by Samsung Electronics and SK Hynix, as concerns about artificial intelligence investment and Chinese chip competition rattled Asian markets.
Investors are positioning ahead of Wednesday’s U.S. inflation report and today’s major bank earnings, while several tokens suffered double-digit losses and Autheo plunged 92% after a suspected exploit.
South Korea’s equity benchmark plunged 5.5% on Tuesday, leaving the index roughly 38% below its June all-time high. Crypto also saw sharp swings, with bitcoin BTC$83,696.96 falling below $81,000 before rebounding above $84,000 and settling just above $83,000. Ether ETH$2,504.33 fell as low as $2,400.
The Asian selloff reflected mounting concerns about the AI trade. Broadcom CEO called current AI investing “casino-like”, knocking investor confidence and reported advances in memory-chip technology at China’s CXMT raised concerns of stronger competition for established chipmakers.
Samsung Electronics (005930) and SK Hynix (00060) led the declines, falling 7% and 10%, respectively.
Investors are also positioning ahead of Wednesday’s U.S. CPI report, another potential source of volatility. Headline inflation is forecast at 3.6% year over year, with core inflation at 2.5%. A headline reading in line with that forecast would mark an acceleration from the previous month’s 3.4%.
Meanwhile, third-quarter earnings season gathers pace, with JPMorgan Chase (JPM), Goldman Sachs (GS) and Citigroup (C) scheduled to report later today, offering a fresh assessment of consumer demand, credit conditions and corporate activity.
Derivatives positioning
Traders are being forced out, not piling in: 24-hour futures volume is $212 billion, up 66% from $126 billion yesterday. Open interest (OI), the dollar value of all open contracts, is $143.4 billion, down 1.58%. Liquidations rose 284% to $813 million. Heavy trading, shrinking OI and forced closures mean leverage is being flushed out, not added.
Sellers still have a slight edge in aggressive trading: The 24-hour long/short taker volume ratio is 48%/52%, a reversal from yesterday, when longs accounted for 52% of the flow. Taker volume counts trades where someone pays up to get filled immediately, so it shows who is more eager. Buyers are closer to parity, but not in control.
SPCX and SNDK are the busiest futures in crypto, though they are small: They are the most-traded contracts in the past 24 hours. According to Coinglass, 24-hour volume is up 700% in SPCX and 271% in SNDK. OI in both is still just under $1 billion, significantly less than the majors. The surge in volume is mostly fast trading, not a build up of positions.