Bitcoin Kimchi Premium Surges to 3-Year High Amid Market Downturn

Investors in the broader crypto industry, particularly in the United States, are selling their bitcoins (BTC), but traders in South Korea appear to be doing the opposite. This is evident in the South Korean Bitcoin kimchi premium surging to a level not seen in three years.

According to data from the on-chain analysis platform CryptoQuant, the Bitcoin kimchi premium is up more than 12%, hovering at levels last seen in January 2022.

What is The Kimchi Premium?

The Bitcoin kimchi premium is a crypto indicator that helps gauge market sentiment. The index tells the difference between bitcoin’s valuation on global trading platforms and South Korean exchanges. This metric often rises when there is high BTC demand among Korean investors or during panic selling among global exchanges, but less selling pressure on Korean platforms.

It is worth mentioning that bitcoin’s price on South Korean exchanges differs from that of global platforms because of policies that prevent foreign investors from trading on local firms and local investors from engaging in arbitrage trades.

Although a high kimchi premium indicates growing interest among South Korean investors, that may not be the case now. CryptoQuant founder and CEO Ki Young Ju said the metric spiked not because South Koreans are buying the BTC dip but because global investors are converting their bitcoins to the United States dollar (USD).

Ju insists that a few Koreans are converting their bitcoins to the South Korean won, and other countries are likely seeing the same trend. The crypto analyst asserted that the main reason for the Bitcoin plunge and broader market decline appears to be the strong U.S. Dollar Index (DXY). Bitcoin usually surges when the DXY weakens.

Bullish Or Bearish Sign?

Per historical data, a declining kimchi premium is always considered a positive sign for BTC because it signifies more room for growth. Contrarily, a surging premium is bearish because BTC experiences significant correction after a peak in the metric.

According to data from CoinGlass, the crypto market has recorded over $2.3 billion in liquidations over the past 24 hours, so a further plunge would be disastrous for investors. BTC had already fallen below $92,600 hours before press time; further corrections could see the crypto asset plummet to $89,000 or less.

Meanwhile, President Donald Trump’s announcement of severe tariffs on the U.S. economy has contributed to the ongoing market bloodbath.