The Shanghai Composite Index closed at 3,913.79 points on July 13, down 2.06% for the day. During the session, it dipped to a low of 3,900.67 points, setting a new low in nearly three months and also losing the “annual line.” The drivers are not singular—Changxin Memory’s 29.5 billion IPO is set to be subscribed, drawing liquidity away; South Korea’s SK hynix’s plunge on the day has sparked spillover panic; geopolitical tensions in the Middle East have pushed up oil prices; and in the interim reporting season, AI and semiconductors saw profits being locked in at high levels. With five layers of negative factors colliding at once, markets in the Asia-Pacific region fell first, and A-shares were unable to stay immune.

On the trading floor, funds rotated toward defense sectors such as oil and gas, banks, and traditional Chinese medicine, while liquidity in the technology track was drained. Across the market, 176 stocks hit their daily limit down. What’s interesting is that the spillover of risk-avoidance sentiment also prompted some funds to refocus on Bitcoin: BTC edged up slightly during the Asian session. U.S.-listed crypto proxies such as MSTR and COIN also moved along with it. With there’s nowhere for capital to hide in A-shares, it has to find an exit somewhere.

Institutional commentary is relatively constructive. Zhang Qiyao of Industrial Bank said the annual line is still a strong support; China Securities Construction & Investment judged that conditions do not have “the requirements for a shift from bull to bear”; and BOC Securities described the situation as “range consolidation,” not a trend-turning inflection point. That said, trading volume narrowed by 570 billion compared with last Friday, and funds on the sidelines are still watching. Grinding out a bottom may not end anytime soon.