South Korean Stock Surge Could Stall Bitcoin Rally, Analyst Cautions Investors

Bitcoin Bulls Cautioned as Kospi Hits Record Highs

South Korea’s Kospi index reached a new all-time high of 4,340 points, driven by expectations of shareholder-friendly policies and positive global market sentiment.

Crypto analytics firm Alphractal flagged the milestone as a potential warning for Bitcoin (BTC) bulls. Historically, Bitcoin has often neared its cycle highs when the Kospi set record levels.

“Every time the Kospi reached a new all-time high, Bitcoin was trading close to its peak for the cycle. The last time this occurred was in 2021,” Alphractal noted on X.

In 2021, the Kospi peak coincided with Bitcoin approaching $70,000 before entering a prolonged bear market. Similar patterns were observed in late 2017 and mid-2011, underscoring a recurring relationship between the two assets.

Market Implications

While the correlation is not absolute, it reflects Bitcoin’s sensitivity to global risk-on/risk-off flows. Positive sentiment typically drives capital into emerging market equities and high-risk assets like Bitcoin, while risk aversion can trigger declines in both.

“Now that the Kospi has reached a new record, it serves as an incremental signal that Bitcoin’s current bull cycle may be nearing its end. Capital continuously rotates across major economies, risk assets, and speculative instruments, often independent of fundamentals,” said Joao Wedson, founder and CEO of Alphractal.

With Bitcoin trading around $114,000, traders are advised to monitor global equity markets closely, as Kospi’s record highs could influence BTC’s near-term momentum.