Korean Bitcoin Premiums Surge: Retail Investors Drive Momentum, Says CryptoQuant

Crypto News- In a recent analysis by CryptoQuant, a fascinating trend in the cryptocurrency market has come to light, centering around the surging Korean premium. This premium, often referred to as the Korea Premium Index (KPI) or ‘Kimchi Premium,’ has evolved into a pivotal indicator for monitoring shifts in the crypto landscape, particularly within South Korea—a major player in the global crypto markets.

Korean Bitcoin Premiums Surge: Retail Investors Drive Momentum, Says CryptoQuant

The escalating values of the Korean premium are being seen as a potential indicator of robust buying pressure from Korean retail investors. While a high Korean premium may initially appear as a bullish sentiment indicator, it’s crucial to emphasize that it is also frequently utilized to identify potential price tops.

The KPI acts as a valuable gauge of market sentiment in South Korea. A higher KPI signifies a bullish market sentiment, indicating an upsurge in buying pressure that propels crypto prices higher on South Korean exchanges compared to international platforms. Conversely, a lower KPI signals a bearish market sentiment, suggesting diminished buying pressure and the potential for increased selling activity.

Yet, the KPI is not just a measure of market sentiment; it’s also employed to identify potential price tops. CryptoQuant highlights that this is achieved by considering two key factors: immediate access to cash for coin purchases on exchanges by Koreans and the prevalent Fear of Missing Out (FOMO) hype in the market.

South Korean Traders Drive a Spike in Trading Volume

It’s worth noting that the current 14-day moving average for the Korean Premium Index mirrors the levels observed during the peak of the Bitcoin price cycle in the fourth quarter of 2021. This historical parallel raises questions about whether the current market conditions could lead to a similar outcome.

South Korea has played a pivotal role in the recent surge in digital asset market volume. In November alone, their market share surged to approximately 13%, a substantial increase from the 5.2% recorded at the beginning of the year in January. According to Chung Hochan, the Head of Marketing at CryptoQuant, this surge can be attributed to the absence of a futures market catering to retail investors in South Korea. This absence has prompted retail investors in the country to actively explore significant leverage opportunities within the crypto market, with a particular focus on altcoins.