While the price of Bitcoin (BTC) continues to range from $ 56,000 to $ 60,000, “Kimchi Premium” reaches annual highs.
Is the rising premium in South Korea a sign that the Bitcoin rally has just begun or is it a peak signal?
As we mentioned in our previous articles, “Kimchi Premium” signifies a serious advantage in the cryptocurrency world. Kimchi Premium occurs when Bitcoin is traded in South Korea at a higher price than other major markets such as the USA.
In 2017, Kimchi Premium surpassed 20%, causing Bitcoin to be traded at $ 20,000 in the US and $ 24,000 in South Korea.
Last week, on March 29, we reported that this premium has reappeared and reached 6%. Since then, Kimchi Premium has continued to increase, reaching 11%.
What does it mean for Bitcoin to have Kimchi Premium at 11%?
The Bitcoin market peaked when Kimchi Premium last rose to ATH, and then saw a drastic recovery. While Prim has stated that the South Korean cryptocurrency market is showing signs of overheating, this rise is not enough to mark the peak.
CryptoQuant’s CEO, Ki Young Ju, stated that the premium is alarming, but the foundations of Bitcoin appear strong. The difference between today and 2017 is that South Korea only accounts for 1.7% of the transaction volume of the global Bitcoin market. Therefore, Ki Young Ju; He says he thinks the impact will not be as great as in 2017, although the South Korean market has experienced a decline as a result of the higher premium.
More importantly, unlike 2017, the ongoing Bitcoin rally is now dominated by high net worth investors and institutions, as evidenced by the massive exits by Coinbase.
However, the reason why many analysts are concerned about the overcrowded cryptocurrency market in South Korea is the significant interest in emerging crypto assets. For example, cryptocurrencies with the highest volume in Bithumb; New Altcoins that have only been around for a few months, not Ethereum (ETH) or Bitcoin
Exits from top exchanges often indicate that institutional investors are buying Bitcoin and moving their assets in self-hosted wallets. Ki regarding this situation:
“Taking a short-term gamble on BTC doesn’t seem like a good idea. The probability of falling below $ 52,000 is lower as institutions may have made purchases at this level. ”