Bitcoin Korea Premium Index Turns Red, Decline Incoming?

Keshav Verma

2 years ago

3 mins read

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Data shows the Bitcoin Korea Premium Index has taken a negative value recently, something that could lead to a drawdown in the asset’s price.

Bitcoin Korea Premium Index Has Declined Into Negative Values Recently

As pointed out by an analyst in a CryptoQuant post, past instances of this trend have resulted in pullbacks for the price of the cryptocurrency. The “Korea Premium Index” is an indicator that measures the difference between the Bitcoin price listed on South Korean exchanges and that listed on foreign platforms.

This metric helps us know whether Korean investors are currently buying more or less of the cryptocurrency compared to the investors residing in other parts of the world.

When the value of the metric is positive, it means the price listed on the South Korean exchanges is higher than that on the global exchanges right now. Such a trend implies that Korean holders are applying a higher buying pressure (or perhaps just a lower selling pressure) than foreign investors.

On the other hand, negative values of the indicator suggest that users of the South Korean exchanges are selling more of the cryptocurrency than the global holders currently.

Now, here is a chart that shows the trend in the Bitcoin Korea Premium Index over the past year:

The value of the metric seems to have declined in recent days | Source: CryptoQuant

As shown in the above graph, the Bitcoin Korea Premium Index has had a positive value for much of the current rally that started back in January of this year. This would suggest that the Korean investors have been participating in a heavier amount of buying than the foreign investors.

Recently, however, the indicator has been gradually going down, implying that the buying pressure from this segment of the market has been dropping off. Coincidentally, the price of the cryptocurrency has overall moved sideways since this trend formed.

In the last few days, the metric has now declined enough to enter into the negative territory, which is a sign that the buying pressure may now have flipped into selling pressure instead.

In the chart, the quant has marked the past instances where the Bitcoin Korea Premium Index had assumed some strong negative values. It looks like whenever such values of the indicator appeared, the BTC price observed some decline shortly after.

Based on this pattern, the cryptocurrency may be at risk of another drawdown in the near future. However, the metric still only has a small negative value so far, while the past declines have generally come when the values have been much lower.

This may mean that if the Bitcoin Korean Premium Index doesn’t decrease further from here, the trend that was seen in the past might not repeat itself.

BTC Price

At the time of writing, BTC is trading around $27,900, up 1% in the last week.

Looks like BTC hasn't stopped its consolidation yet | Source: BTCUSD on TradingView

Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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