On Tuesday, Bitcoin climbed back above $83,000, brushing off a severe selloff across Asian stock markets that coincided with more than $800 million in cryptocurrency liquidations.
BTC managed to bounce back after briefly dipping under $81,000, even as semiconductor stocks suffered a deepening rout that dragged South Korea’s benchmark KOSPI index down by 6%.
South Korea’s AI stock collapse exposes concentrated market risks
Reports noted that South Korea’s KOSPI plunged up to 7.4% before paring some losses to finish the session at 6,035.35. The drop briefly pushed the index beneath the 6,000 threshold and triggered a sell-side trading curb as the nation’s premier semiconductor manufacturers extended their losses.
Samsung Electronics dropped 7.39%, while SK Hynix slid 10.09%, marking a fifth consecutive session of losses for both corporations.
Together, these two memory-chip producers make up roughly half of the KOSPI’s total market capitalization, leaving the wider index exceptionally vulnerable to shifts in expectations for AI infrastructure spending.
During Tuesday’s trading, foreign investors offloaded roughly 4.5 trillion won ($3.35 billion) in Korean equities, adding to a string of withdrawals that have heavily pressured the country’s technology sector.
According to investment research firm Paradis Labs, the retreat stemmed from sustained selling of Samsung and SK Hynix shares by foreign institutional investors.
The firm labeled the prevailing institutional approach as “Sell Korea, Buy US,” while observing that domestic investors had remained largely patient, with some funds shifting out of memory-chip makers and into financial stocks.
Paradis Labs also reported that the market deterioration had been brewing over multiple sessions, noting that recent remarks from Broadcom CEO Hock Tan had amplified the ongoing selloff.
Tan likened speculative AI investments to gambling, exacerbating worries that the massive capital expenditures in the industry might fail to yield adequate returns.
Those comments lined up with a technological disclosure from China’s ChangXin Memory Technologies, which announced it had created a DRAM architecture capable of shrinking the memory-cell area by roughly 30%.
The firm plans to roll out items utilizing the technology by the close of 2026, sparking worries about heightened competition for South Korean memory suppliers. However, the company’s ability to manufacture the technology commercially on a large scale remains unproven.
Analysts at Bitunix indicated that the broader market correction underscored a growing vulnerability to financing risks and concentrated investor positioning tied to the artificial intelligence sector.
The analysts observed that robust semiconductor earnings failed to stave off heavy selling, while reduced leveraged exposure and weaker support from share buybacks may have worsened the decline.
This pressure has also affected wider institutional strategies. BlackRock downgraded US equities from overweight to neutral and raised its allocation to short-term Treasuries as anxieties surrounding AI-driven volatility and elevated borrowing costs grew.
Meanwhile, Paradis Labs cautioned that South Korea’s reliance on imported crude oil presents an additional risk amid rising tensions involving Iran. Persistent energy price hikes could exacerbate inflationary pressures and undermine confidence in the nation’s stock market.
The weakness in semiconductors has already spilled past Korea’s borders, with the Philadelphia Semiconductor Index sliding 2.7% on Monday and Japan’s Nikkei 225 dropping 1.8% on Tuesday.
Bitcoin’s recovery faces pressure after $813 million liquidation wave
Bitcoin’s recovery stood in contrast to steep drops in Asian equities, though it came on the heels of a derivatives market shakeout that wiped out hundreds of millions of dollars in leveraged stakes.
Data from CoinGlass showed that total crypto liquidations reached $812.9 million across a 24-hour window, impacting 170,209 traders. Long positions represented $686.72 million—or 84.5% of the aggregate—while short bets totaled $126.19 million.
Bitcoin bore the brunt of the losses at $192.14 million, with long positions accounting for nearly 74% of that figure. Ethereum followed with $180.5 million in liquidations, while Solana recorded $60.85 million. The single largest liquidation involved a $9.65 million Bitcoin long position on Binance.
As Bitcoin’s price dropped, forced closures of bullish positions compounded selling pressure and accelerated the downturn. Conversely, the subsequent bounce caught bearish traders off guard, as short liquidations helped fuel the sharp reversal.
Even so, underlying trading patterns suggest buyers have struggled to regain firm control despite the price recovery.
CryptoQuant analyst JA Maartunn pointed out that Bitcoin’s Net Taker Volume dipped back into negative territory, signaling that aggressive selling within the derivatives markets continued to overshadow buying activity.
This reading points to persistent selling pressure even as Bitcoin rebounds, implying that passive accumulation and the unwinding of short positions may be propping up prices without a concurrent surge in aggressive demand.
Consequently, Bitcoin’s recovery remains vulnerable to another test should the equity selloff deepen or leveraged traders rebuild positions ahead of Wednesday’s US inflation figures.
Frequently Asked Questions
- How much were total cryptocurrency liquidations during the market shakeout? Cryptocurrency liquidations exceeded $800 million, specifically reaching $812.9 million over a 24-hour period according to CoinGlass data.
- What caused the sharp decline in South Korea’s KOSPI index? The KOSPI fell due to a deepening rout in semiconductor shares—specifically Samsung Electronics and SK Hynix—prompted by foreign investor withdrawals, concerns over AI infrastructure spending, and competition from China’s ChangXin Memory Technologies.
- How much did foreign investors sell in South Korean equities on Tuesday? Foreign investors sold approximately 4.5 trillion won ($3.35 billion) worth of Korean equities during the session.
- Which cryptocurrency suffered the largest liquidations? Bitcoin recorded the largest liquidations at $192.14 million, followed by Ethereum at $180.5 million and Solana at $60.85 million.
