South Korea Stock Crash Could Drag Bitcoin Below Key Support: Analyst

South Korea’s KOSPI index fell 8.95% on July 13, triggering an intraday circuit breaker. The selloff was led by chipmaker SK Hynix, which dropped more than 15%, now about 38% below its record high from June 25. The market shock has raised concerns that a wider risk-off move could spread into US equities and crypto assets already pressured by geopolitical tensions and weaker sentiment.

Analyst Hupzy from Spot On Chain described the move as a panic-driven selloff, noting that circuit breakers are uncommon outside severe market stress. He linked the drop in SK Hynix to a rapid reversal in the AI and semiconductor trade, warning that weakness in those sectors could affect crypto assets tied to AI narratives.

Even before the selloff, markets were already dealing with uncertainty, with over $1.5 trillion erased across assets in 10 hours, including Bitcoin (BTC), gold, and silver. At the time of writing, BTC had slipped below $63,000, recovering from an early July dip below $58,000, but failing to hold above $64,000.

Analyst Ash Crypto attributed the losses to new US-Iran hostilities, a possible Bank of Japan yen intervention, and rising bond yields. Hupzy stated that the KOSPI plunge could push BTC through support if US equities follow Asia lower. “For BTC: broadening equity panic puts downside pressure on crypto risk assets. If US markets follow Asia lower, expect crypto selling to intensify. The KOSPI crash is the kind of cross-asset shock that can break correlations and drag BTC below support,” they wrote on X.

However, analyst Michaël van de Poppe said Bitcoin’s price action was “holding up well,” testing $65,000 while maintaining support around $61,000. Fellow analyst Ted Pillows warned that BTC must hold the $62,500 zone after repeated failures near $64,500–$65,000 resistance, or it could drop below $61,000.

The KOSPI decline has added to concerns about global market support if selling pressure continues. Hedgie Markets shared data showing US cash holdings (money market funds and bank deposits) had fallen to just 0.42 of the S&P 500’s market cap, near the lowest ever recorded, close to levels before the dot-com crash. While money market funds hold a record $7.95 trillion, the S&P 500 has grown to roughly $69 trillion, making the dry powder appear smaller relative to the market it needs to cushion.

Source: https://cryptopotato.com/south-korea-stock-crash-could-drag-bitcoin-below-key-support-analyst/