Trading Update: Korean equities enter a technical bear market, Hong Kong tech stocks lead strongly, and Bitcoin sees a modest pullback

Article author, source: PANews

Following a rebound of over 11%, Bitcoin has entered a period of consolidation. Market sentiment has eased from extreme fear but still faces a test of support levels. Coinbase's Bitcoin premium index has recorded negative premiums for 50 consecutive days—the longest streak on record—highlighting significant selling pressure in the U.S. market and indicating that overall risk appetite has yet to fully recover. Market maker Wintermute noted that this rally is more of a 'textbook correction,' driven by macro easing, the Fed’s dovish stance, and institutional adoption tailwinds for Ethereum, rather than a structural shift. Prices may edge slightly higher in the short term, but sustained capital inflows are needed to confirm the trend.

On-chain data also failed to deliver clear bullish signals. According to CryptoQuant analysts, Bitcoin’s NUPL indicator remains at 0.158—close to levels seen in early 2023—but the 30-day and 100-day EMAs have yet to enter the negative territory historically associated with bear market bottoms, suggesting further downside risk in this cycle. Galaxy Research believes Bitcoin is gradually entering a value zone with limited room for further declines; however, if global liquidity tightens, prices could retreat to the $40,000–$46,000 range.

From a technical standpoint, many traders are focusing on the support level around $63,000. If Bitcoin holds steadily above this level, it could aim again for the resistance zone between $64,600 and $65,000. However, a break below $63,000 could prompt the market to retest support near $60,000 or even $58,000. Short-term price action will remain highly dependent on capital flows and shifts in macro policy.

Looking ahead, Federal Reserve policy will be the key variable influencing digital asset trends. Markets will closely monitor the latest FOMC minutes, the U.S. dollar index, Treasury yields, and ETF fund flows. If institutional capital resumes net inflows and U.S. risk appetite improves, Bitcoin could push toward $65,000 or higher; otherwise, the $63,000 support level will face renewed pressure.

Key highlights for today:

Bitcoin L2 network Botanix will gradually shut down; users must withdraw their assets before July 9.

Base will activate the B20 token standard on its mainnet on July 9.

Movement (MOVE) will unlock approximately 165 million tokens on July 9, valued at roughly $2 million.

Upbit 24-hour trading volume ranking: XRP, SLX, BTC, ETH, AI

Bitcoin spot ETFs: +$21.435 million, marking three consecutive days of net inflows.

Ethereum spot ETFs: +$26.9252 million, marking four consecutive days of net inflows.

HYPE spot ETF: +$4.3227 million

SOL spot ETF: +USD 1.672 million

Top gainers among the top 100 cryptocurrencies by market cap today:M rose 8.7%, ZEC gained 4.6%, MORPH climbed 4.3%, BDX advanced 2.8%, and JST increased by 2.7%.

The Nasdaq plunged sharply overnight, weighing on the Tokyo Stock Exchange today. The Nikkei 225 experienced significant intraday volatility and closed down 2.11%, marking its third consecutive day of losses. Technology stocks led the decline, dragged lower by U.S. semiconductor shares and amplified by weakness in South Korean markets.

Escalating tensions in the Middle East have driven up energy costs. Japan relies on crude oil from the Strait of Hormuz for 93.5% of its needs, sparking fears of imported inflation that directly impacts corporate profits. High-valuation tech stocks were hit hard: semiconductor giant Tokyo Electron dropped 3.7% in a single day, capacitor maker Taiyo Yuden—key supplier for AI servers—plunged 8.5%, and Advantest fell 4.7%, reflecting growing market doubts about the sustainability of the semiconductor boom cycle.

Japan’s macro-financial environment has entered a danger zone, with the 10-year government bond yield rising to 2.86%—a 30-year high—and the 30-year yield surpassing 3.98%. Analysts at Daiwa Securities noted that investor confidence in the AI sector has yet to recover, while Goldman Sachs economists warned that Japan could fall into a vicious cycle of mounting debt and high interest expenditures. Markets are closely watching for signs of 'fiscal dominance' as the Bank of Japan faces intensifying fiscal pressure. Over the next 48 hours, attention will focus on U.S. wholesale inventory data and the Fed’s meeting minutes for guidance on global liquidity.

South Korea's stock market has become one of Asia's most volatile markets. It closed down 5.35%, impacted by global AI supply chain adjustments, foreign investors taking profits, and concentrated deleveraging by margin traders. The index has now plunged more than 20% from its record high in late June, officially confirming entry into technical bear market territory. South Korea’s Ministry of Economy and Finance urgently stated it would closely monitor risks together with the central bank and regulators, explicitly identifying excessive concentration in chip stocks as the primary source of market instability.

The two leading chipmakers—previously major profit drivers—have now become the 'main arteries' bleeding the broader market. Samsung Electronics’ share price tumbled 6.25%, while SK Hynix dropped sharply by 5.68%. Extreme concentration in the semiconductor sector has amplified market swings, with leveraged ETFs acting as volatility multipliers. Some South Korean economists have openly criticized the KOSPI for increasingly resembling a 'casino,' arguing that leveraged ETFs tied to single stocks represent a policy blunder that not only magnifies market volatility but also persistently erodes corporate value and investor wealth.

According to Byun Jun-ho, an analyst at IBK Investment & Securities, semiconductor stocks are undergoing a sharp correction aligned with the turning point of slowing earnings growth—an undeniable sign that investor sentiment has peaked and is now retreating. A portfolio manager at Fidelity International warned that the AI semiconductor boom hinges entirely on roughly $1 trillion in annual capital expenditures by a handful of tech giants; if this spending proves unsustainable, the resulting downturn could be catastrophic.

On Wednesday, mainland China’s stock markets saw volatile declines, with the Shanghai Composite Index falling 0.49%, the Shenzhen Component Index dropping 1.87%, and the ChiNext Price Index down 1.7%.

Most stocks declined, though computing power, AI servers, and cloud computing segments surged against the trend. Inspur Information, Sangfor Technologies, Wangsu Science & Technology, and YS Cloud Intelligence all rallied to their daily trading limits. In contrast, lithium batteries, lab-grown diamonds, and humanoid robotics sectors posted noticeable corrections.

Shares across the semiconductor self-reliance theme staged a broad rebound, with Canxin Semiconductor hitting its daily limit. Hua Hong Hongli rose more than 10% to a record high after international investment banks raised their target price.

Hong Kong stocks opened higher and continued to rally strongly, with the Hang Seng Index surging approximately 700 points to reclaim the 24,000 mark, while the Hang Seng Tech Index jumped more than 5%, driven by broad-based gains across tech and internet stocks.

Alibaba surged more than 12%, reclaiming a market capitalization of HK$2 trillion and leading the market higher, as reports indicated that Taobao's instant delivery service is narrowing losses faster than expected and integration of Agent products is progressing.

Xiaomi Group’s share price soared over 10%, reclaiming the HK$25 mark, after the company officially unveiled its new automotive brand 'SkyNomad' amid high-profile fanfare, with its first vehicle slated for launch in the second half of the year.

At the sensitive juncture of the first batch of cornerstone shares becoming unlocked, Zhipu AI not only avoided the typical sell-off but also received firm long-term holding commitments from nearly 70% of national-level strategic investors and local government guidance funds; JPMorgan further aggressively raised its target price to HK$2,000, fueling an intraday counter-trend surge of 18%;

SMIC, Lenovo, Kuaishou, and other semiconductor and tech stocks posted broad gains.

Southbound funds recorded net purchases exceeding HK$11 billion, reflecting capital rotation from South Korea and Japan into Hong Kong-listed 'domestic substitution' plays and undervalued AI-related assets. Institutional views suggest that Hong Kong equities’ valuation appeal is resonating with portfolio rebalancing flows, with near-term catalysts including the Fed minutes and China’s macroeconomic data releases.

Over the next day or two, attention will turn to China’s June CPI/PPI data. The central bank and market participants expect policy measures to be implemented in Q3, which should improve liquidity; recovery trends in tech and consumer sectors warrant close monitoring. Amid global market volatility, the broader market is seeking a new equilibrium, and Hong Kong equities may continue to show resilience.

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