{"id":221043,"date":"2021-04-07T16:37:21","date_gmt":"2021-04-07T13:37:21","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/kimchi-premium-collapses-short-term-top-signal-or-a-reset-for-bitcoin\/"},"modified":"2021-04-07T16:37:21","modified_gmt":"2021-04-07T13:37:21","slug":"kimchi-premium-collapses-short-term-top-signal-or-a-reset-for-bitcoin","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/kimchi-premium-collapses-short-term-top-signal-or-a-reset-for-bitcoin\/","title":{"rendered":"# Kimchi premium collapses: Short-term top signal or a reset for Bitcoin?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a35fda4b92de\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a35fda4b92de\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/kimchi-premium-collapses-short-term-top-signal-or-a-reset-for-bitcoin\/#A_big_pullback_in_South_Koreas_Bitcoin_market\" >A big pullback in South Korea&#8217;s Bitcoin market<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/kimchi-premium-collapses-short-term-top-signal-or-a-reset-for-bitcoin\/#Is_this_a_top_signal\" >Is this a top signal?<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Kimchi premium collapses: Short-term top signal or a reset for Bitcoin? <\/strong>&#8221;<\/p>\n<div class=\"post-content\" data-v-5a136f3a>The so-called Kimchi premium, which measures the premium of the Bitcoin (BTC) price in South Korea&#8217;s cryptocurrency exchange market, plummeted overnight.<\/p>\n<p>The premium declined from 22% to 15% within a matter of hours on April 7, and it is continuing to drop across major South Korean exchanges.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-04\/7fb3158a-9d51-407b-9a44-a69b9e622386.jpeg\" alt=\"\" title=\"\"><figcaption style=\"text-align: center;\"><em>BTC Korea Premium index. Source CryptoQuant<\/em><\/figcaption><\/figure>\n<h2><span class=\"ez-toc-section\" id=\"A_big_pullback_in_South_Koreas_Bitcoin_market\"><\/span>A big pullback in South Korea&#8217;s Bitcoin market<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Overnight, as CryptoQuant CEO Ki Young Ju noted, the price of Bitcoin fell particularly hard on South Korean exchanges.<\/p>\n<p>As the price of Bitcoin dropped, the Kimchi premium fell in tandem. But, since BTC price fell significantly harder on South Korean exchanges, the premium plunged quickly within a matter of hours.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-04\/1457f13b-c099-4d29-9d4c-01c7fa41b079.jpeg\" alt=\"\" title=\"\"><figcaption style=\"text-align: center;\"><em>Bitcoin falls hard on South Korean exchanges. Source: Ki Young Ju<\/em><\/figcaption><\/figure>\n<p>There are two possible reasons why the premium dropped in the manner that it did.<\/p>\n<p>First, traders from outside of South Korea might have found a way to successfully arbitrage the premium. One potential way this could h<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>en is if traders from other Asian markets coordinate with whales in South Korea to sell BTC and withdraw on the same day.<\/p>\n<p>Second, altcoins that were increasingly gaining momentum throughout the week severely corrected. As the capital from the altcoin market exited, traders might have also sold BTC and ETH, bringing down the large-cap cryptocurrencies.<\/p>\n<p>Ki <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/ki_young_ju\/status\/1379699310439276545?s=20\">said<\/a>:<\/p>\n<blockquote><p>&#8220;It seems someone finally figured out how to arbitrage this Kimchi premium opportunity. The trading volume in 30min time frame on @upbitglobal , the largest Korean exchange, was bigger than @Binance &#8216;s. This drop seems related to Kimchi pullback.\u00a0One evidence of arbitrage: @BithumbOfficial , one of the largest exchanges in Korea, $BTC inflow mean has been increasing while all exchanges&#8217; is decreasing. It seems some whales are depositing BTC to Korean exchanges.&#8221;<\/p><\/blockquote>\n<p>XRP, as an example, was consistently one of the most popular cryptocurrencies in the South Korean market throughout the past week.<\/p>\n<p>As Cointelegraph reported, XRP broke out against Bitcoin, rising above $1 for the first time in over three years.<\/p>\n<p>But, as altcoins like XRP fell, it is possible that the market sentiment around Bitcoin and Ethereum also worsened in the Asian market, bringing down the premium.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Is_this_a_top_signal\"><\/span>Is this a top signal?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>When the Kimchi premium fell substantially in 2017, the price of Bitcoin plummeted by more than 50% within several days.<\/p>\n<p>This time around, the price of Bitcoin dropped by 5% to $56,000 and has started to recover fairly quickly thereafter.\u00a0<\/p>\n<p>The probability of the cryptocurrency market recovering in the short term remains high because there were large liquidations in the past 48 hours.<\/p>\n<p>For example, a single XLM trade resulted in a liquidation worth $84 million. Given that well over $1 billion were liquidated in the last 24 hours, the crypto derivatives market is likely to reset.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-04\/e0708c42-8d42-4987-92bd-07fde33a84ce.jpg\"><figcaption style=\"text-align: center;\"><em>BTC funding rates. Source: Bybt.com<\/em><\/figcaption><\/figure>\n<p>The funding rate of Bitcoin across major futures exchanges was around 0.15% before the drop. This is 15-fold higher than the default 0.01%, indicating that the derivatives market was extremely overheated. <\/p>\n<p>Though, as the chart above shows, the funding rates remain at relatively high levels, which suggests that the price may see more downside in the short term.\u00a0<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/kimchi-premium-collapses-short-term-top-signal-or-a-reset-for-bitcoin\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Kimchi premium collapses: Short-term top signal or a reset for Bitcoin? &#8221; The so-called Kimchi premium, which measures the premium of the Bitcoin (BTC) price in South Korea&#8217;s cryptocurrency exchange market, plummeted overnight. The premium declined from 22% to 15% within a matter of hours on April 7, and it is continuing to drop&#8230;<\/p>\n","protected":false},"author":1,"featured_media":221044,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDQvNWM5NzNjMjQtOWM5OS00ZjBhLTk0ODAtYzM3ZDllMjc0ODhlLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,74937,74939,73785,72420],"class_list":["post-221043","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin","tag-bitcoin-price","tag-market-analysis","tag-markets","tag-south-korea"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/221043","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=221043"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/221043\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/221044"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=221043"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=221043"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=221043"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}