Bitcoin prices dropped lost 3.12 percent in early trading Monday, while the rest of the crypto market followed suit, turning lower aggressively after their record-setting bull runs at the start of this week.
Bitcoin wobbles around $56,000. Source: BTCUSD on TradingView.com
At first, it appeared like a regular profit-taking exercise among western day-traders against overvaluation risks. Nevertheless, blockchain analytics platform CryptoQuant noted that the sell-off appeared out of South Korea-based crypto exchange Upbit Global. It happened after a so-called “Kimchi Premium” indicator reached its three-year peak.
What is Kimichi Premium?
In retrospect, Kimchi Premium a metric which represents the difference in the bitcoin prices on South Korean exchanges and other global trading avenues. Arcnae Research analysts note that when the indicator peaks, it somewhat ends up blowing up the bitcoin bullish bubbles. The metric reached 47 percent in January 2018 and 63 percent in 2017, and followed up with vast price corrections in the global bitcoin market.