Bitcoin recovered above $83,000 on Tuesday after briefly falling below $81,000, despite a major sell-off in Asian equities and cryptocurrency liquidations of more than $800m.
South Korea’s benchmark KOSPI index fell 6% as semiconductor stocks extended their losses. The index dropped as much as 7.4% before recovering to close at 6,035.35. It briefly fell below 6,000, triggering a sell-side trading curb.
Samsung Electronics declined 7.39% and SK Hynix lost 10.09%, marking a fifth successive session of falls for both companies. The two memory-chip manufacturers represent about half of the KOSPI’s total market capitalisation, leaving the index particularly exposed to changing expectations over spending on artificial intelligence infrastructure.
Foreign investors sold approximately 4.5 trillion won ($3.35bn) of South Korean equities during Tuesday’s session, extending a series of withdrawals that have put continued pressure on the country’s technology sector.
Investment research firm Paradis Labs said the decline reflected a sustained exit by foreign institutions from Samsung Electronics and SK Hynix. It described the dominant institutional approach as “Sell Korea, Buy US”, while saying domestic investors had generally remained patient, with some money moving from memory-chip companies into financial stocks.
The firm added that the weakness had been developing over several sessions. Comments from Broadcom Chief Executive Officer Hock Tan, who compared speculative AI investment with gambling, added to concerns over whether the industry’s huge capital commitments would deliver sufficient returns.
Those concerns coincided with an announcement by China’s ChangXin Memory Technologies that it had developed a DRAM architecture capable of cutting memory-cell area by approximately 30%. The company plans to launch products using the technology by the end of 2026, although its ability to manufacture it commercially at scale has not been demonstrated.
Bitunix analysts said the wider correction reflected increasing concern about the financing risks and concentrated investor positioning behind the AI sector. They said strong semiconductor earnings had failed to prevent heavy selling, with reduced leverage and weaker support from share buybacks potentially worsening the decline.
BlackRock also moved US equities from overweight to neutral and increased its preference for short-term Treasuries, as concerns over AI-related volatility and higher borrowing costs grew.
Paradis Labs warned that South Korea’s reliance on imported crude oil represented another vulnerability as tensions involving Iran escalate. A prolonged rise in energy prices could add to inflationary pressure and weaken confidence in the country’s equity market.
The semiconductor sell-off has spread elsewhere. The Philadelphia Semiconductor Index fell 2.7% on Monday, while Japan’s Nikkei 225 dropped 1.8% on Tuesday.
Bitcoin’s recovery followed a sharp derivatives-market shakeout. CoinGlass data showed $812.9m of cryptocurrency liquidations over 24 hours, affecting 170,209 traders. Long positions accounted for $686.72m, or 84.5%, compared with $126.19m in short positions.
Bitcoin recorded $192.14m of liquidations, with longs making up nearly 74%. Ethereum followed with $180.5m and Solana with $60.85m. The largest individual liquidation was a $9.65m Bitcoin long position on Binance.
CryptoQuant analyst JA Maartunn said Bitcoin’s Net Taker Volume had turned negative again, suggesting aggressive derivatives selling remained stronger than buying. The recovery could therefore face another test if the equity sell-off worsens or traders rebuild leveraged positions ahead of Wednesday’s US inflation report.
