Bitcoin Slides as South Korean Market Rout and Crypto Bill Delay Weigh on Sentiment

Bitcoin declined about 2% as South Korea’s Kospi index suffered an 11% plunge and the U.S. Senate delayed action on the Clarity Act, leaving markets focused on Wednesday’s Federal Reserve decision.

Bitcoin (BTC) has fallen 0.53% since the start of the UTC trading day after dropping roughly 2% during the overnight U.S. session.

Two major factors have pressured market sentiment.

The first came from South Korea, where semiconductor stocks faced heavy selling pressure, causing the benchmark Kospi index to collapse 11%. The sharp decline marked one of the index’s biggest daily drops in recent years and triggered broader weakness across global risk assets.

The second factor was regulatory uncertainty after the U.S. Senate postponed consideration of the Crypto Clarity Act. Lawmakers instead shifted attention toward a Russia sanctions package and federal nominations, with only two weeks left before the Aug. 8 summer recess. As a result, the bill’s chances of passing this year have become increasingly unclear.

Ethereum (ETH) also moved lower, falling 0.56% to $1,880 after failing to break above the key $2,000 level on Monday. Investors are now watching both Wednesday’s Fed interest-rate announcement and the Senate’s limited remaining legislative schedule as major market drivers this week.

Traditional markets also traded under pressure, with Nasdaq 100 futures declining 0.70%, gold dropping 0.93%, and silver falling 1.50%.

Derivatives market signals turn cautious

Futures traders shift bearish:
The taker long/short ratio in futures markets has turned negative, with short positions accounting for 51.5% of taker volume. This represents a sharp reversal from the bullish positioning seen in recent sessions. Takers are traders who execute orders at current market prices.

XRP futures activity increases:
Open interest in XRP futures climbed to 2.35 billion tokens, up nearly 6% from the previous day. Meanwhile, futures open interest for Bitcoin, Ethereum, and Solana remained mostly unchanged, suggesting participation has stayed relatively limited during the recovery from early June lows.

Other altcoin futures see withdrawals:
Contracts linked to tokens including SHIB, AVAX, LINK, and DOGE recorded declining open interest, indicating capital is moving away from some speculative positions.

CVD signals bearish pressure:
The 24-hour open interest-adjusted cumulative volume delta (CVD) has turned negative for the top 25 cryptocurrencies for the first time in at least three weeks. The shift suggests sellers are gaining control through aggressive market orders rather than passive limit orders.

Funding rates weaken:
Bitcoin funding rates remain close to neutral, showing balanced positioning between buyers and sellers. However, funding rates for Ethereum, Solana, XRP, and TRX have moved negative, reflecting increasing demand for bearish positions.

Volatility remains subdued:
Despite major upcoming events, including the Federal Reserve meeting and the core U.S. PCE inflation report, Bitcoin and Ethereum options markets are not showing signs of significant stress. Thirty-day implied volatility measures for both assets remain near recent lows, suggesting traders expect relatively calm conditions.

Options market shows downside preference:
Put-call skews for Bitcoin and Ethereum options listed on Deribit have increased slightly, reflecting the recent decline in spot prices. Ethereum options show a smaller downside bias compared with Bitcoin, although put options remain the most actively traded contracts for both assets, indicating demand for downside protection.

Token market update

Lighter (LIT) was among the strongest performers in the crypto market, rising 3.97% to $2.21 as it continued recovering from last week’s profit-taking. The token successfully defended the $2.10 support zone for the third time this month.

MORPHO and Ethena (ENA) were also among the few gainers, climbing 1.54% and 1.46%, respectively. Both projects continued showing relative strength in the decentralized finance sector despite broader market weakness.

Fetch.ai (FET) recorded the largest decline over the past 24 hours, dropping 9.48%. NEAR, HYPE, and Worldcoin (WLD) also fell between 8% and 9%, with artificial intelligence-related and layer-1 tokens facing the strongest selling pressure.

PUMP declined 3.07% after Monday’s strong rally, although it remains above weekend levels as traders began taking profits.

CoinMarketCap’s Altcoin Season Index stood at 53 out of 100, slightly lower than Monday but still above most readings seen throughout July.

About The Author