Trading Moment: Semiconductor Sector Sees Sharp Correction, Can Bitcoin Hold Above $80,000?

Daily market data review and trend analysis, produced by PANews.

Macro Market

U.S. stock markets fluctuated under the shadow of inflation, with the Dow Jones Industrial Average rising slightly by 0.11% to 49,760.56 points, while the Nasdaq and S&P 500 fell by 0.71% (to 26,088.20 points) and 0.16% (to 7,400.96 points), respectively.

US April CPI rose 3.8% year-on-year, while core CPI rose 2.8%, both exceeding expectations. The overall CPI hit a three-year high, completely shattering market expectations for a Federal Reserve rate cut this year. CME Group data shows the probability of a 25 basis point rate hike in December has risen to over 30%. However, Citigroup and Mitsubishi UFJ are still betting against the trend, insisting that the labor market is fragile and the Fed will still cut rates by 50 to 75 basis points this year. It is worth noting that the US Senate officially confirmed Warsh as a member of the Federal Reserve Board yesterday, and the market expects him to also lack room for easing.

Japanese government bond yields rose across the board , with the 5-year yield climbing 3 basis points to 1.945% and the 20-year yield rising 5 basis points to 3.495%, both record highs. The 10-year yield rose to 2.590%, the highest level since May 1997.

South Korea's KOSPI index rebounded 2.6% today, driven by retail investors' contrarian buying, after initial panic surrounding the "national dividend." Yesterday, the South Korean ETF (EWY) plunged over 7%, marking its second-largest single-day drop since the COVID-19 pandemic began in March 2020. This was triggered by the South Korean presidential office's proposal to establish an "AI citizen dividend," which was interpreted as distributing excess profits from artificial intelligence companies to the public. The office later clarified that the dividend would come from excess taxes, not profits. Samsung Electronics' stock price initially plummeted over 6% after unsuccessful wage negotiations but has since recovered, rising 2%. SK Hynix reversed its losses, surging over 8%.

The three major A-share indices rose collectively , with the Shenzhen Component Index and the ChiNext Index both rising by more than 1%. The ChiNext Index broke through 4,000 points, reaching a new high in nearly 11 years and approaching the historical high of 4,037.96 points in 2015.

On May 13, the Indian government announced that it would double the import tax on gold and silver to 15% in an attempt to curb the "gold rush" and defend the rupee. The news caused the price of Indian gold futures to surge by 6%, and related gold and silver ETFs also soared by more than 5%.

Furthermore, copper prices continued to rise due to multiple factors, including tight sulfur supplies in the Middle East, increased demand for copper in the electrical industry driven by the expansion of the AI industry, and limited global copper mine supply. LME copper futures rose to $14,106.50 per tonne, nearing historical highs, while COMEX copper futures hit a new high of $6.6455 per pound. Institutions such as TD Securities and Scotiabank are collectively bullish on copper prices, predicting a global copper market supply gap of 350,000 tons by 2027. Tight sulfuric acid supplies and delayed resumption of production at Indonesian copper mines further exacerbated supply pressures, leading analysts to believe that copper prices will remain strong in 2026, with a long-term upward trend likely to continue.

AI and the Stock Market

The semiconductor and chip sector experienced a sharp correction after a period of euphoria. The Philadelphia Semiconductor Index plunged 3.01% in a single day , with an intraday flash crash of nearly 7%. The chip ETF fell 3.15%, Qualcomm plummeted 11.46%, Intel dropped 6.82%, SanDisk and Micron suffered heavy losses of 8.5% and 3.5% respectively, and ASML, Credo, AMD, and TSMC ADRs were also not spared.

Goldman Sachs warns that the surge in leveraged ETFs in the semiconductor sector, with short gamma exposure doubling to approximately $2 billion per day in the past 6 to 9 months, could trigger a chain reaction of selling as deleveraging occurs. Goldman Sachs recommends investors hedge their risk by holding down options on a basket of SMH and leading AI stocks. Legendary tech investor Dan Niles believes the current AI boom is similar to the period leading up to the 1998 dot-com bubble, with the profits of the Big Seven tech giants relying more on the revaluation of unlisted assets than on actual earnings. He predicts that proxy AI growth will slow early next year, and related stocks could plummet by 30%-50%.

Bitcoin price

Bitcoin has been fluctuating around the $80,000 mark. Recently, influenced by inflation data and the appointment of Federal Reserve governors, it rebounded from $79,900 to $81,000, a more than 40% rebound from the low of $60,000 at the beginning of the year. However, it is still about 36% away from its all-time high of $126,000. Data shows that a large number of short limit orders have accumulated in the $81,550 and $83,000-$85,000 ranges, while a large number of long limit orders have also gathered at $76,328, $75,000, and $70,000. Currently, Strategy's Bitcoin holdings have reached 818,869 coins, with an average cost of approximately $75,543.

Bearish view

The core logic of the short sellers is that this round of price increases lacks support from spot buying, relies excessively on contract short squeezes, and faces significant technical resistance and macroeconomic headwinds.

Wintermute: The breakthrough of $80,000 was entirely driven by short squeezes in perpetual contracts, with futures open interest surging to $58 billion, but spot trading volume fell to a two-year low. The rally, lacking support from the spot market, is extremely fragile.
Ali Charts: The 200-day moving average at $82,500 is a critical resistance level. Miners are selling on rallies to lock in profits. If it cannot be broken quickly, the market will shake out leveraged longs at $75,000 or even $70,000.
Pension-usdt.eth, a whale, maintains that "the shorting logic still holds" despite a $13 million loss on its 1,000 BTC short position, betting that the price will fall back to $71,500 after breaking the wedge support.
Matthew Dixon: The market has completed a five-wave decline from the high of $82,833, and the short-term direction is clearly downward. This may be the starting point of a larger downtrend.
Swiss: Closely monitor the $79,000 support level. If it breaks down and is confirmed, we will decisively enter a short position.
Killa: Bitcoin's price failed to regain the opening price of the week. Once it falls below the psychological level of $80,000, it will likely continue to decline to $74,000 to $76,000 to find opportunities to go long.

bullish view

The core logic of the bullish camp is that the expectation of macro liquidity expansion remains unchanged, ETF funds and institutional buying have built a solid bottom, and technical indicators have issued long-term bullish signals.

Arthur Hayes: AI capital expenditures and war spending will force fiat currency to expand unchecked. The Bitcoin bull market started as early as the end of February. Breaking the previous high of $126,000 is inevitable. Once it reaches $90,000, the upward trend will explode.
Michaël van de Poppe: There are no signs of weakness in the market, and every pullback is met with quick buying. It is expected to reach $86,000 to $90,000 in the next 2-3 weeks. "Buy on dips" remains the winning strategy.
Matt Mena: Bitcoin's stable price performance around $81,000 shows strong market support. As long as the daily close is above $82,000, Bitcoin's price is expected to break through the key range of $85,000 to $90,000 in the future.
Scient: Since the bottom at $65,500, Bitcoin's upward trend has been very clear. As long as it can hold the $80,000 retracement level, the bulls will continue their strong advance.
Mooncake: Bitcoin buyers are buying strongly at $79,800, and there is a real possibility that it will slowly push the price above $83,000.
Material Indicators: Bitcoin bulls are attempting to establish a support level around $80,700, building momentum for a breakout above the 200-day moving average.

Key data (as of 14:00 HKT on May 13)

(Data source: Coinank, Upbit, SoSoValue, CryptoBubbles)

Bitcoin ETF: -$233 million
Ethereum ETF: -$131 million
SOL ETF: +$19.069 million
XRP ETF: +$5.3098 million
Fear of Greed Index: 42 (Neutral)
Upbit 24-hour trading volume rankings: XRP, BTC, SAHARA, ETH, ONDO
Sector Performance: The AI sector rose 1.42% in the last 24 hours, while the SocialFi sector fell 2.41%.

24-hour liquidation data: A total of 79,542 people worldwide were liquidated, with a total liquidation amount of $248 million, including $50.19 million in BTC liquidations, $45.16 million in ETH liquidations, and $39.67 million in CHF liquidations.

Today's Outlook

Warsh has been confirmed as a member of the Federal Reserve Board of Governors; the vote to confirm the chairman is expected to take place on Wednesday.
The Ethereum Foundation has opened applications for EPF7, with a deadline of May 13th.
Base: The first standalone network upgrade, "Base Azul," will launch on the mainnet on May 13th.
The Moscow Exchange will launch futures trading for Solana, Ripple, and Tron on May 14.
The U.S. Senate Banking Committee is scheduled to hold a hearing on the CLARITY bill on May 14.
DeFi protocol Carrot has announced its impending shutdown, with May 14th being the deadline for fund withdrawals.
Aptos (APT) will unlock approximately 11.31 million tokens, worth about $12.4 million, on May 13.
US initial jobless claims for the week ending May 9 (in thousands): Expected 205,000, previous 20 (May 14, 20:30)

The top 100 cryptocurrencies by market capitalization with the largest gains today are: Unibase up 15.4%, Injective up 13.3%, Stacks up 6.7%, Stable up 5.4%, and NEAR Protocol up 4.7%.