South Korean Market Under Pressure

South Korea's main stock market, the KOSPI, has dropped more than 42% from its highest level ever. The decline became serious enough for the country's Finance Minister to call an emergency meeting.

Large technology companies such as Samsung and SK Hynix make up a big part of the KOSPI. Their weakness suggests that investor excitement around AI-related stocks may be slowing down.

US Interest Rates Unchanged

The US Federal Reserve has decided to keep interest rates between 3.50% and 3.75%, which was exactly what financial markets expected. As a result, the announcement had little impact on the markets.

Many large investment firms are selling shares after companies report good earnings. This follows the common strategy of "buy the rumor, sell the news."

At the same time, individual investors continue buying stocks whenever prices fall because they believe the market will recover soon. Falling Knives?

Strong Demand for Stock ETFs

Investors continue to put large amounts of money into US stock ETFs. So far this year, ETF inflows have reached $880 billion. If this trend continues, total inflows could reach $1.4 trillion by the end of 2026, setting a new record.

US Stock Market Performance

Dow Jones

The Dow Jones began the week with strong gains and moved above the important 52,300 resistance level. It has since pulled back and is now testing support near 51,685.

This support level has been tested several times, making it more likely that the index could break lower if selling continues.

S&P 500

The S&P 500 is trading between 7,340 support and 7,520 resistance.

Although short-term momentum is weak, the longer-term trend is still positive.

Nasdaq-100

The Nasdaq-100 is currently the weakest major US stock index because AI-related stocks continue to face heavy selling.

The index has fallen below the important 28,550 support level. If selling continues, it could decline toward 26,000, which is about 8% lower than current levels.

Bitcoin and Crypto Market *It is getting interesting!

Bitcoin Following Seasonal Pattern

Even though Bitcoin closed June below $58,600, it is still expected to finish July with a gain, following its normal seasonal trend.

This outlook would change only if Bitcoin falls more than 9% from its current price. Since last year, I have consistently maintained that the $50,000 area is likely to mark the market bottom.

Crypto Regulation Delayed

The Clarity Act, which aims to provide clearer rules for the crypto industry, has passed the House and a Senate committee.

However, the bill is currently delayed in the Senate because of disagreements over ethics concerns linked to former President Trump's personal crypto investments.

Important Bitcoin Price Levels

Support

• $60,000: A major psychological support level, although it has become weaker after being tested several times.
• $57,500: The most recent swing low where buyers may return.
• $50,000: The next major support level if prices continue to fall.

Resistance

• $66,000: A strong resistance level that was previously support.
• $71,000: The most important long-term resistance. A move above this level would suggest buyers are back in control, although the first breakout may face selling pressure.

Be careful!

As pointed out last week, the strong rally in AI-related stocks appears to be losing momentum. At the same time, Bitcoin is trying to build a price bottom.

Despite recent weakness in stock prices, record amounts of money continue flowing into US stock ETFs. This suggests that investors still believe the current market decline is a normal correction rather than the beginning of a major market crash.

However, overall market conditions also suggest that we may be entering the later stages of the current market cycle, so investors should remain very cautious and manage risk carefully.