Bitcoin surged past $83,000 on Tuesday despite a significant sell-off in Asian stocks, with cryptocurrency liquidations topping $800 million.
BTC bounced back after briefly dropping below $81,000, while semiconductor stocks continued to plummet, dragging South Korea’s KOSPI index down by 6%.
The KOSPI index plunged by as much as 7.4% before recovering slightly to close at 6,035.35. This drop, which briefly pushed the index below 6,000, triggered a sell-side trading curb as major semiconductor manufacturers in the country, like Samsung Electronics and SK Hynix, extended their losses.
Samsung Electronics saw a 7.39% decline, while SK Hynix dropped by 10.09%, marking the fifth consecutive session of losses for both companies. These two memory-chip giants make up around half of the KOSPI’s market capitalization, making the index particularly susceptible to changes in AI infrastructure spending outlook.
Foreign investors offloaded approximately 4.5 trillion won ($3.35 billion) worth of Korean equities during the session, contributing to the ongoing tech sector slump in the country. Research firm Paradis Labs noted that this retreat by foreign institutions from Samsung and SK Hynix has been a trend, while domestic investors have shown more patience.
The firm highlighted the prevailing institutional strategy as “Sell Korea, Buy US,” as concerns over AI investment returns intensified. The recent comments from Broadcom CEO Hock Tan, likening speculative AI investment to gambling, added to these worries.
This downward spiral in the tech sector was further exacerbated by a technological advancement from China’s ChangXin Memory Technologies, which announced a breakthrough in DRAM architecture that could potentially challenge South Korean memory producers.
The semiconductor weakness spread beyond Korea to global markets, with the Philadelphia Semiconductor Index falling by 2.7% and Japan’s Nikkei 225 declining by 1.8% on Tuesday.
Bitcoin’s recovery, on the other hand, faced pressure following a massive liquidation wave of $813 million in the cryptocurrency market. This shakeout wiped out leveraged positions and added selling pressure, leading to a sharp downturn.
Cryptocurrency liquidations reached $812.9 million over a 24-hour period, affecting over 170,000 traders. The majority of the liquidations were bullish positions, with Bitcoin and Ethereum recording the largest losses.
As Bitcoin struggled to maintain its recovery, aggressive selling in derivatives markets outweighed buying activity, indicating continued selling pressure. This leaves Bitcoin’s rebound vulnerable to further tests amid ongoing market volatility and uncertainties.
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