South Korea’s Bitcoin Kimchi Premium Drops: What Does It Mean for BTC?
Bitcoin kimchi premium in South Korea has fallen sharply amid a broader market decline, reflecting enthusiasm among digital asset investors in the country.
According to data from CryptoQuant, the Bitcoin kimchi premium fell to 1.5% on Friday in afternoon trading in Asia.
Bitcoin Kimchi Premium Slumps
For the uninitiated, the kimchi premium is an indicator of the difference between the price of bitcoin on South Korean exchanges and global crypto trading platforms. The word refers to South Korean food.
Due to capital control policies that prevent foreign investors from trading on local platforms, the price of BTC on South Korean exchanges differs from the price on international platforms. At the same time, the policies prohibited domestic investors from engaging in arbitrage trading. These restrictions have led to a limited supply of crypto in South Korea, which has led to wide price gaps due to high demand.
The Kimchi premium has become one of the key indicators for tracking changes in the crypto space and investor sentiment. A high premium compared to the global market indicates buoyant investor sentiment, while a low figure is a sign of bearish sentiment and reduced buying pressure.
The premium is currently 1.54%, the interest of South Korean investors in Bitcoin has decreased. According to data from CoinMarketCap, this lack of enthusiasm has led to a decrease in trading volume on major local exchanges.
A positive sign?
The last time the Bitcoin Kimchi premium hovered at its current level was in mid-February, when BTC was around $48,200. In the first week of March, the index rose 10.32 percent to a 27-month high. It increased in the following weeks, hitting 11.44% when BTC recorded a new high.
However, the premium has gradually declined since BTC fell from its all-time high and settled below $70,000. Since April, there is bloodshed in the crypto market, and the index is not free. BTC touched $56,700 before recovering and fell below $60,000. At the time of writing, the property was trading at $63,000, up 3.2% in the last 24 hours.
Nevertheless, the current Kimchi premium level could be a positive sign for the crypto market, as it suggests that there is enough room for a rally and a major BTC recovery could be witnessed soon.
The post South Korean Bitcoin Kimchi Premium Drops: What Does It Mean for BTC? First appeared on CryptoPotato.
