The Kospi Index and the Roundhill Memory ETF (DRAM) are both showing significant bearish technical patterns as investors brace for Micron Technology’s earnings report later today. The signals are sparking caution across risk assets, including cryptocurrencies, which often correlate with moves in the tech sector.
The Kospi Index, tracking South Korea’s largest companies, plummeted 10% earlier this week and continued sliding today, reaching levels not seen since mid-June. The index had previously rallied over 320% from its April 2024 low of 2,268 to a peak of 9,387 on Monday, driven by the AI supercycle and soaring memory chip demand from Samsung and SK Hynix. However, the fear that Micron’s stock might drop after its earnings—mirroring the post-earnings sell-offs in Broadcom and Oracle—has triggered a sharp retreat. Broadcom shares remain 23% below their yearly high, while Oracle is down 35% from its peak.
Wall Street analysts remain optimistic, expecting Micron’s revenue to have surged 279% in the last quarter, with forward guidance pointing to a 275% increase. But technical indicators paint a worrying picture. The Kospi has formed a double-top pattern and a bearish divergence on the Relative Strength Index (RSI), while the Percentage Price Oscillator (PPO) shows a bearish crossover. Analysts suggest a potential pullback to the 7,000 psychological level.
Meanwhile, the DRAM ETF, which has seen assets under management skyrocket to over $20 billion, is also flashing a bearish divergence. The ETF’s price retreated from a record high of $81 to around $70, with its RSI forming a descending channel. The fund faces significant concentration risk, with Micron, SK Hynix, and Samsung accounting for over 72% of its holdings. Adding to the uncertainty, SK Hynix is shifting some production capacity to commodity DRAM, potentially signaling cooling demand for high-margin HBM chips, and the company announced a massive $30 billion share issuance to fund AI investments.
For crypto markets, these developments could reinforce a risk-off mood. The sharp drop in tech stocks often spills over into digital assets, and the bearish divergences in key memory indices suggest that even strong earnings might not be enough to sustain momentum. Traders are watching closely for any signs of a broader correction.
