Bitcoin Sees Selloff Amid Global Market Turmoil and South Korean Tech Sell-Off
Key Summary
Bitcoin fell to its lowest levels in over three weeks as the KOSPI Index closed at its lowest since April, following a Korean tech sell-off and fresh losses on South Korean stock markets. The sell-off was attributed to concerns over AI debt obligations, foreign capital outflows, and competition from China.
Bitcoin Price Action
Bitcoin price action continued to see contagion from a Korean tech sell-off after the KOSPI Index fell 7.5% on Thursday. Bitcoin (BTC) fell to its lowest levels in over three weeks on Thursday as crypto tracked fresh losses on South Korean stock markets.Market Factors Contributing to the Sell-Off
The weakness came after South Korea’s Korea Composite Stock Price Index, or KOSPI, finished the day 7.5% lower, taking week-to-date losses to 15.5%. KOSPI Composite Index one-day chart. Source: Cointelegraph/TradingView As with earlier in the week, tech giants bore the brunt of the sell-off, with SK Hynix down 11% and Samsung Electronics finishing 9.5% lower on the day.Concerns Over AI Debt Obligations and Foreign Capital Outflows
Concerns over AI debt obligations, foreign capital outflows, and competition from China contributed to the South Korean market rout, with KOSPI’s 200-day moving average dropping to as low as 5,450 points, a level not seen since late July. It ended Thursday’s trading session at 5,554 points, marking its lowest daily close since April 8.Global Macro Headwinds and Interest Rate Hikes
Talking to local media publication The Korea Herald, Mirae Asset Securities analyst Kim Seok-hwan warned that global macro headwinds would add further friction going forward. “Volatility is expected to persist in the near term,” he said. “As domestic supply-demand conditions deteriorate, the market has become more sensitive to external risks, while a near-term improvement in the global environment appears unlikely.”Downside pressure on Bitcoin was compounded on the back of Wednesday’s higher-than-expected US inflation data. The September print of the Consumer Price Index (CPI) came in at 3.7% year-on-year, sparking a hawkish shift in market expectations of further interest-rate hikes by the Federal Reserve. “Does the beat force further hiking — or does credit stress prompt policy recalibration?” trading company QCP Capital asked alongside its macro analysis seen by Cointelegraph on Thursday.
Oil Prices and Hormuz Transit Volumes
High oil prices accounting for a significant portion of the uptick in CPI, both WTI and Brent crude fell on Thursday despite mounting tensions in the Middle East. A Singapore-registered oil tanker was sunk in the Strait of Hormuz on Wednesday, a move that the Maritime and Port Authority of Singapore described as “unjustifiable.” Speaking to CNBC, Firas Bechwaty, head of business development at online trading platform ICM, saw little chance of Hormuz transit volumes returning to levels from before the US-Iran war began. “At the same time, Saudi crude continues to reach international buyers through alternative routes, while accelerated emergency stock releases by IEA members provide an additional buffer, preventing a sharp rise in prices, even as tensions remain elevated,” he observed.- \1\1\1\1\1\1\1\1\1\1\1\1\1\1\1\1\1\1\1\1\1\1\1\1\1\1\1\1