Bitcoin Drops 2.7% as Kospi's 10% Meltdown Drags Crypto Into Risk-Off Mode 🌪️

Bitcoin fell roughly 2.7% to about $63,200 after the U.S. market close on Monday, pressured by a sharp selloff in Asian equities led by South Korea's Kospi index, which plunged 10% to its lowest level since mid-April. The Kospi has now dropped 25% from its mid-June peak, with steep losses in heavyweights Samsung and SK Hynix. "The market is falling out of love with chipmakers at the moment and that's been a big driver of the bull market in South Korea," InvestingLive wrote. BTC's slide spilled into the broader crypto market, pulling ether (ETH), XRP, and solana (SOL) lower, while over $670 million in crypto liquidations tore through positions in 24 hours, including $533 million from longs, according to Decrypt. Earlier Monday, BTC had shown brief resilience before NVDA shares tanked on Wall Street, and Decrypt's morning snapshot had BTC at $63,400, down 2.7%, with Ethereum at $1,875 (-4.2%) and Solana at $73 (-4.4%).

The U.S. Senate has delayed action on the CLARITY Act to prioritize a Russia sanctions bill, making a vote on the crypto regulatory legislation unlikely before next week and ahead of the Aug. 8 recess. Bitcoin's latest price tracked $63,566.12, according to market data. The drop came as traders positioned around the Federal Reserve's upcoming rate decision, with markets expecting a hold at 3.50–3.75%. The Federal Open Market Committee meets Tuesday and Wednesday, with Fed Chair Kevin Warsh's decision and press conference due July 29.

Analysts at Bitfinex noted that BTC's correlation with equities is more conditional than often portrayed. "BTC trades with equities when the stress is macro and [interest] rates-driven, and decouples when the stress is idiosyncratic to the equity market. An earnings-and-capital-expenditure debate is precisely that, so on this data the correlation is overstated," the analysts said in a note. Wednesday's rate decision and Thursday's Core PCE and GDP data are expected to drive additional volatility across asset classes.