Bitcoin (BTC) hit ten-day lows at the Wall Street open on Tuesday, as BTC price action followed a sell-off in US stocks.
Key points:
- Bitcoin price action reacts to contagion from an Asian stock sell-off hitting US markets.
- Chipmakers are at the epicenter of the reversal: South Korea’s KOSPI index closed the day down 10.8%.
- Cryptocurrency long liquidations exceed $500 million in 24 hours.
Semiconductor giants drive major decline in Asian stocks
The losses caused by semiconductors in Asia spread to American trade. South Korea’s KOSPI index ended the day down 10.8% in a single session, driven by 14.8% losses for chipmaker SK Hynix, while Japanese memory maker Kioxia Holdings fell 18.3% on the day.
In the US, the tech-heavy Nasdaq Composite Index was down just over 1% at the time of writing. In particular, semiconductor maker Micron Technologies, which fell more than 10% at the open, erased a rally and posted its lowest levels since May 22.
Micron Technologies one-week chart. Source: Cointelegraph/TradingView
Semiconductor stocks are facing increasing scrutiny over the sustainability of hyperscaler capex. Investors are increasingly questioning whether the underlying economics of building AI infrastructure can justify its scale. Combined 2026 capex guidance from Alphabet, Microsoft, Amazon and Meta is now tracking towards $725-730 billion, and Wall Street projects that figure could rise to $900 billion in 2027. Published alphabet its first recorded second-quarter cash burn of $5.9 billion, even as its cloud unit posted 82% growth.
Adding to the financial concerns are the competitive pressures that Chinese startups are putting on US-based AI companies. Moonshot AI’s Kimi K3 open source model, first released two weeks agowas competitively benchmarked against top proprietary systems from Anthropic and OpenAI. This has intensified doubts about the return profile assumed by Western hyperscalers’ spending commitments, given that their capabilities can be replicated at a fraction of the cost.
Crypto Short Liquidations Surpass $500 Million
The current sell-off in the semiconductor and artificial intelligence sector has not left Bitcoin unscathed. Data from TradingView showed that the BTC/USD pair fell below $63,000 for the first time since July 17.
BTC/USD four-hour chart. Source: Cointelegraph/TradingView
Crypto markets saw elevated long liquidations following the day’s reversal, with data from glass coin which represents more than 510 million dollars in 24 hours.
Related: Markets Await Bank of Japan Meeting on Friday as Yen Repeats 40-Year Lows for US Dollar
Cryptocurrency settlement history (screenshot). Source: CoinGlass
On Monday, crypto analytics platform CoinAnk warned of the risk of a long “waterfall” of liquidation below $64,700.
“Extremely large long-term liquidity has built up below this level,” commented.
CoinAnk added that on the upside, little resistance remained, with the area between $65,800 and $66,200 being a “major short liquidation zone.”
