Memory-chip stocks in the U.S. equity market have stayed under pressure, with SK Hynix, Micron and SanDisk extending their losses in the latest session cited by Odaily. The Philadelphia Semiconductor Index, or SOX, has fallen from above 14,600 a month ago to above 10,400, leaving investors to ask how much longer the decline in memory names can last and whether the once-dominant “All in AI” trade still holds.
BIT Brokerage, as cited in the article, framed the current market debate around one central point: SOX has already entered a technical bear market, but that label alone does not say when the sector will bottom.
SOX has already crossed the technical bear-market line
A technical bear market is defined purely by price action. When an index or asset falls 20% or more from a recent meaningful high, it is considered to have entered a technical bear market, regardless of any judgment about fundamentals.
The article lays out the math for SOX. On June 22, the index posted a record closing high of 14,634.72. A 20% drop from that level puts the bear-market threshold at 11,707.78.
On July 17, SOX closed at 11,673.89, formally slipping below that line. The index then kept falling and later touched 10,447.49, widening the gap below the threshold.
In the article’s reading, that move shows the short-term failure of the “All in AI, buy semis on every dip” narrative. The market is no longer operating on a one-way assumption that every selloff should be bought immediately.
A technical bear market states what has happened, not what comes next
The article stresses that a technical bear market is a description of fact, not a forecasting tool. It tells investors that the index has already dropped more than 20% from its high, but it does not answer whether prices will keep falling or where the bottom will be.
Historically, some technical bear markets have marked the start of a V-shaped rebound, while others have turned into the opening phase of a deeper downturn. The difference, the article says, depends on whether the source of selling pressure has been fully cleared.
The article ties this round of selling to deleveraging in South Korea
For this drawdown in memory-chip shares, the article says the market has largely converged on one explanation: South Korea’s stock market is going through a sharp deleveraging cycle, and memory stocks may need to wait for that process to run much further before finding stability.
According to the article, South Korean retail investors had spent much of this year using margin financing together with single-stock leveraged ETFs to bet heavily on market leaders such as Samsung and SK Hynix. Margin balances rose from KRW 27.4 trillion at the start of January to a peak of KRW 38.6 trillion on June 24.
The article argues that leveraged ETFs can intensify both directions because they require daily rebalancing. In rising markets, they amplify gains. Once the trend turns, the same mechanism can force position reductions. Declines trigger margin calls; failed margin calls can lead to forced liquidations, and those liquidations add more selling pressure, creating a negative feedback loop.
Three signals to watch for the end of deleveraging
The article says investors looking for signs of stabilization should track three observable indicators.
1. Margin balances
Margin balances peaked at KRW 38.6 trillion on June 24 and had fallen to KRW 32.7 trillion by July 23. The article says that drop is still not enough. It argues that investors need to see the figure stop falling and show a clear sign of stabilization before concluding that margin-driven selling is close to ending.
2. Forced liquidation amounts
The figures cited in the article show about KRW 550.8 billion in March, jumping to KRW 1.12 trillion in June, then falling back to KRW 473.6 billion in the first half of July. The article describes this series as the most direct reading of deleveraging “blood loss” and says it would need to keep moving back toward normal levels — for example, below several hundred billion won a month — before the market could be seen as having stopped the bleeding.
3. VKOSPI volatility
VKOSPI is described as South Korea’s “fear gauge,” derived from KOSPI 200 options prices to measure expected market volatility over the next 30 days. In the current episode, the article says, VKOSPI at one point surged to five times the level of the VIX and has remained elevated at 85.66. Only a return to a more normal range would suggest that the fear premium embedded in pricing has been largely squeezed out.
Market action still points to an unfinished process
Based on the latest trading pattern, the article says deleveraging has not ended.
KOSPI has triggered nine circuit breakers this year, with sharp rallies and sharp drops alternating in quick succession. The article describes that as a typical middle-to-late-stage feature of deleveraging: the peak of panic selling may have passed, and selling pressure may be easing, but market structure has not stabilized, so even small disturbances can still produce large swings.
The article’s bottom line
- SOX has broken below 11,707.78, confirming a technical bear market and ending the one-way phase of the “All in AI” trade.
- The article identifies forced clearing of leveraged money in South Korea as the core driver of the decline, meaning the bottom depends less on price alone than on how far leverage has been flushed out.
- Progress should be judged through three signals: stabilization in margin balances, normalization in forced liquidation amounts and a retreat in VKOSPI. Based on circuit-breaker frequency and forced-liquidation data, the article says the market appears to be in the middle-to-late stage of deleveraging, with the most intense panic possibly behind it but the structure still unstable.
The article adds that, for market participants, the practical task is not to predict an exact bottom but to build discipline around signal confirmation. Before those signals stabilize, it says, investors should keep positions and leverage under control. Allocation decisions can come later, once confirmation appears.
BIT Brokerage highlights margin and options tools
The article also mentions BIT Brokerage’s margin and securities lending services as well as its options offering.
On margin and securities lending, it says financing can improve capital efficiency during a deep pullback and allow participation in a structural rebound, while short selling can be used to build bearish positions in names hit directly by price competition or weaker fundamentals, helping offset downside risk in existing holdings.
On options, the article says traders can buy put options to build downside protection for a broader portfolio against macro shocks and liquidity stress. It also says buying call options can offer exposure to the upside of high-beta assets with limited and fixed cost.
The piece ends with a risk warning: historical data does not represent future performance, the article is for market observation only and should not be taken as investment advice, and readers should make independent judgments based on their own risk tolerance.