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

Despite the broader selloff, analysts argue that BTC has shown relative strength by holding important support levels during market stress.

South Korea’s KOSPI index fell 8.95% on July 13 after an intraday circuit breaker was triggered, with chipmaker SK Hynix dropping more than 15%.

The market shock has raised concerns that a wider risk-off move could spread into US equities and crypto assets already facing pressure from geopolitical tensions and weaker sentiment.

KOSPI Crash Sends Risk Signals Across Global Markets

Market data shows that the KOSPI closed at 6,806.93 on Monday after its circuit breaker was activated during trading. In that same session, SK Hynix fell 15.37% to KRW 1.845 million, leaving the stock about 38% below the record high it hit just a couple of weeks ago on June 25.

Hupzy from Spot On Chain described the move as a panic-driven selloff and noted that circuit breakers are uncommon outside periods of severe market stress. The analyst also linked the drop in SK Hynix to a rapid reversal in the artificial intelligence (AI) and semiconductor trade, warning that weakness in those sectors could affect crypto assets connected to AI narratives.

Recall that even before the selloff, the markets were already dealing with broader uncertainty, with more than $1.5 trillion erased across assets in 10 hours, including Bitcoin (BTC), gold, and silver, as well as other major Asian stock indexes. At the time of writing, BTC had slipped below $63,000, having recovered from an early July drop below $58,000 and briefly going past $64,000 before it lost ground again.

Analyst Ash Crypto blamed the losses on new hostilities between the US and Iran, a possible Bank of Japan yen intervention, and rising bond yields, with Hupzy stating that the sort of shock caused by the KOSPI plunge could push BTC through support if US equities get dragged down by their Asian counterparts.

“For BTC: broadening equity panic puts downside pressure on crypto risk assets,” they wrote on X. “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.”

However, another market watcher, Michaël van de Poppe, posted that Bitcoin’s price action was “holding up well” despite the pressure, saying it had tested the $65,000 area while maintaining support around $61,000. Fellow analyst Ted Pillows warned that the OG crypto needed to hold the $62,500 zone after repeated failures near the $64,500 to $65,000 resistance level, or it could drop below $61,000.

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Why the Cash on the Sidelines Might Not Show Up

The KOSPI decline has added to concerns about how much support global markets have if selling pressure continues. Hedgie Markets shared data showing that US cash holdings, including money market funds and bank deposits, had fallen to just 0.42 of the S&P 500’s market cap, near the lowest level ever recorded and close to where it sat before the dot-com crash.

The account also noted that while money market funds hold a record $7.95 trillion, the S&P 500 had grown to roughly $69 trillion, so the dry powder looks smaller against the market it needs to cushion.