Opinion: Despite today’s sharp rebound, the Korean stock market is unlikely to quickly recover to its previous highs

BlockBeats reported that on July 31, well-known US stock trader Ariel Hernandez stated that at the end of July, excessive leverage in AI semiconductor stocks in the South Korean stock market led to a sharp plunge. After a brutal leverage liquidation, some traders were forced to close their positions, making it difficult for the market to quickly rebound in a V shape back to the highs of several weeks ago.

Ariel Hernandez cited the leveraged liquidation case in the silver market earlier this year to illustrate that after such a trend forms, it is often accompanied by an increase in sell-side supply and reduced willingness for new buyers to leverage, which typically prevents a rapid reversal. Previous highs often take several months or even years to approach again.