Bitcoin and ether slip then recover as South Korean stocks plunge on AI concerns
Bitcoin and ether drop, then rebound, as Asian markets sell off
Bitcoin fell below $81,000 on Tuesday before recovering above $83,000. Ether slipped as low as $2,400 during the same period. The volatility came as South Korea's main stock index plunged 5.5%, the largest single-day drop in recent memory, pushing the benchmark roughly 38% below its June all-time high.
The sell-off was driven by mounting concerns around artificial intelligence spending and rising competition from Chinese chipmakers. Broad market anxiety spilled over into crypto, where several tokens posted double-digit losses. Autheo dropped as much as 92% after a suspected security exploit.
What moved South Korean stocks
Broadcom's CEO described current AI investing as "casino-like," shaking investor confidence across the region. Meanwhile, reports that China's CXMT has made advances in memory-chip technology raised fears of stronger competition for established chipmakers like Samsung and SK Hynix. Samsung Electronics fell 7% and SK Hynix fell 10%, leading the declines.
Key numbers
- Bitcoin fell below $81,000, recovered above $84,000, and settled just above $83,000.
- Ether dropped to $2,400 before settling near $2,500.
- South Korea's equity benchmark fell 5.5%, now about 38% below its June high.
- BTC 24-hour futures volume surged to $212 billion from $126 billion the day before, up 66%.
- Liquidations rose 284% to $813 million, indicating heavily leveraged positions were forced out.
- BTC open interest fell 1.58% to $143.4 billion, meaning traders were closing positions rather than adding to them.
- The long/short taker volume ratio flipped to 48% longs and 52% shorts, a reversal from the prior day.
- SK Hynix-linked token open interest rose 18% as its price fell 8%, reflecting onchain positioning in the risk-off mood.
What comes next for markets
Investors are now looking ahead to Wednesday's U.S. inflation report. Headline CPI is forecast at 3.6% year over year, up from 3.4% the prior month, with core inflation expected at 2.5%. A number in line with the forecast would mark a slight acceleration.
Major bank earnings are also coming out today, with JPMorgan Chase, Goldman Sachs, and Citigroup all scheduled to report, giving traders another read on consumer demand and credit conditions.
Why this matters
The episode shows how quickly concerns in traditional Asian markets can ripple through crypto. Bitcoin and ether did not just fall in sympathy — they recovered after the initial panic, suggesting some sellers were leveraged traders being forced out rather than long-term holders exiting. The data supports that reading: heavy trading volume paired with shrinking open interest and soaring liquidations points to a leverage flush, not new conviction selling.
What is still unclear
It is unclear whether the AI investment concerns will ease or deepen in coming weeks, and whether South Korean chip stocks will continue to face pressure from Chinese competition. The impact of Wednesday's inflation data on both traditional and crypto markets remains to be seen.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.
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