The Kimchi Award is back. From 29. March, bitcoin (BTC) is trading up by more than 6% on major South Korean crypto-currency exchanges.
Data from CryptoQuant shows that the premium on the South Korean market has been non-existent for many months and even dropped to -6% in early February 2021, when BTC fell below $30,000.
The so-called kimchi premium occurs when the price of bitcoin on South Korean exchanges is higher than on other markets.
The return of this premium is a bullish sign, indicating that demand for bitcoin in South Korea is likely to outstrip supply.
PremiumBitcoin on Korean exchanges. Source: CryptoQuant
Why the kimchi premium could be big for bitcoin
While South Korea does not account for the majority of the global bitcoin market, it remains one of the largest exchange markets in terms of daily trading volume.
On CoinMarketCap, for example, the Bithumb exchange ranks seventh in the world in terms of daily volume traded, with $1.3 billion in bitcoins exchanged in the past 24 hours.
This premium has been particularly high during previous bull runs, including in 2017, when BTC traded more than 20% higher on South Korean exchanges than on Coinbase and other major exchanges.
The Kimchi Award brings to light two major trends. First, it shows that general market sentiment in South Korea remains good. Secondly, it shows that there are more buyers in the market.
Market sentiment in Korea is not bad. $BTC sellers are clearly not Koreans. https://t.co/4UIneKZKuu
– Ki Young Ju 주기영 (@ki_young_ju) 25. March 2021
The premium had recovered in recent weeks before Visa announced it would start processing USDC transactions on the Ethereum blockchain.
When the news broke, both Bitcoin and Ethereum rose about 5% in three hours, leading to a strong rally in the cryptocurrency market. This announcement could bolster the rapid pace of institutional adoption this year and the possibility of a wider adoption of bitcoin.
I feel the massive adoption of crypto currency here, Ki Yong Ju, CEO of CryptoQuant, responded to the news.
What traders think will happen next
According to the pseudo-trader known as Rekt Capital, a new all-time high becomes very likely if bitcoin goes above $59,000.
Weekly chart of the bitcoin price. Source: Rekt Capital, TradingView.com
The trader noted:
BTC is recovering this week after the wicks of the last two weeks, which showed a slowdown in selling, will try to crack the confluence of the black diagonal and the red horizontal resistance zone (~$59,000). Break through this range and #Bitcoin will reach new heights.
Meanwhile, another CryptoCapo trader said the momentum could potentially propel bitcoin to new highs and higher, perhaps as high as $80,000. He said:
The panic made no sense. Some people just want to see the world burn ….. Send $80,000 or more