Analysts at cryptocurrency analysis firm CryptoQuant recently commented on changes in the Korean Premium, which has led to Bitcoin being priced higher on South Korean cryptocurrency exchanges.
CryptoQuant: “Increasing South Korean Premium May Point to a Correction in Price”
Analysts noted that the Bitcoin Korea premium is currently positive while the Coinbase premium is negative, indicating a potential short-term correction. They said the historical chart shows that if the Korean Premium overheats by more than 3% and the Coinbase Premium turns negative, it typically means US investors sell and South Korean investors competitively buy Bitcoin.
The Korean premium, also called the kimchi premium, means that the BTC price on South Korean cryptocurrency exchanges is priced slightly higher than the rest of the world.
Analysts said the following in their comments on the subject:
“In this case, this marked a short-term correction in the bull market and the beginning of a bear market at its peak. However, we are currently in a recovery or bull rally phase, so a short-term correction is more likely.”
They also noted that three such signals have occurred in a row since mid-December. They believe that the increase in money invested in Bitcoin exchanges by whale investors and miners, as well as investors selling the Grayscale Bitcoin Trust (GBTC) ETFs, increases the likelihood of a pullback and sideways movement in the near term rather than an increase in price.
*This is not investment advice.