• Bitcoin recovered above $83,000 after briefly falling below $81,000 as a sell-off in Asian chip stocks and U.S. technology futures weighed on risk appetite.
• Oil prices remained elevated amid threats to Middle Eastern supplies, raising inflation concerns and the prospect of Federal Reserve rate increases that could pressure cryptocurrencies.
• Traders are awaiting Thursday’s U.S. consumer price index report, with some expecting institutional investors to hedge their crypto holdings rather than reduce their exposure.

Bitcoin climbed back above $83,000 on Tuesday, shaking off an early drop as a sharp selloff in Asian chip stocks and U.S. tech futures weighed on risk appetite.

The largest cryptocurrency by market value fell to just under $81,000 at 00:50 UTC before recovering above $83,000, according to CoinDesk data. Ether bounced from five-day lows, while XRP (XRP) turned higher after touching three-week lows. Zcash (ZEC), solana (SOL) and several other major tokens followed a similar pattern.

Asian tech rout

The early crypto weakness came as South Korea’s KOSPI plunged more than 6% intraday, falling below 6,000 and hitting its lowest level since late July. The index remained down roughly 6% in morning trade.

Chipmakers led the rout. Samsung Electronics and SK Hynix each fell roughly 8%, extending their losing streaks to five sessions. Investors were rattled by concerns over AI-related valuations and rising competition from Chinese memory-chip producers.

Hong Kong’s Hang Seng slipped 0.4%, while Nasdaq futures fell 0.6%, extending Monday’s 0.78% decline in the tech-heavy index.

Oil stays elevated

WTI crude traded near $92.67, holding most of Monday’s sharp recovery from below $90. Fresh attacks in Saudi Arabia and continued threats to shipping through the Strait of Hormuz have kept energy-market uncertainty elevated.

Brent crude hovered around $106 a barrel after a three-day rally, as traders weighed potential supply disruptions against expectations of additional Russian diesel exports.

A higher oil raises inflation risks, strengthening the case for Fed rate hikes, a headwind for crypto.

The Dollar Index, which tracks the greenback’s value against major currencies, held near 102.50, the highest since April last year.

CPI in focus

Crypto traders are now looking to Thursday’s U.S. consumer price index report as the next major catalyst. Some expect large investors to increase hedging rather than reduce their crypto exposure.

“With US inflation data approaching, I expect institutional investors to focus on adding protection through derivatives and hedging strategies rather than materially reducing their underlying exposure,” said Paul Howard, senior director at market-making firm Wincent.

“This is typically how committed institutional participants manage periods of heightened risk: maintaining their core positions while using derivatives to protect against downside and continuing to treat cryptocurrencies as an asset class capable of generating returns,” Howard added.