Bitcoin Kimchi Premium has jumped 10% as the market faces a selloff.
This premium printed this new outlook as South Korean exchanges recorded low volumes.
Amid the headwinds, analysts advocate cautious bets.
The infamous Bitcoin Kimchi premium is back, making waves amid a massive market sell-off. to CoinDesk, this premium, the gap between Bitcoin’s price on South Korean exchanges and global platforms, has surged over 10%. Meanwhile, Bitcoin itself dropped 6% in the past 24 hours.
This price gap creates an arbitrage opportunity where traders can buy Bitcoin on global exchanges and sell it for more in South Korea. However, strict capital controls make cash out in the country difficult. So traders turn the premium into a market sentiment indicator rather than an easy profit route.
Korean Retail Traders Retreat amid Crypto Market Meltdown
Trading volumes on major South Korean exchanges, Bithumb and Upbit, have declined over the past week, suggesting that retail traders are stepping back. This trend is reinforced by the drop in dollar-margined stablecoin balances, like Tether’s USDT, and reported withdrawal delays.
In a statement, Bradley Park, an analyst at Seoul-based DNTV Research, reflects on the changing market dynamics. He said retail investors are either fully invested in the spot or have moved funds to decentralized exchanges (DEXs).
Unlike past surges, where retail-driven FOMO inflated the Kimchi premium, this spike is a passive reaction to economic uncertainty. The strength of the U.S. dollar also influences it.
Park further highlighted that the Kimchi premium can spike when trading volume rises. Likewise, it can also act as a cushion when Bitcoin prices on overseas exchanges drop. However, he warned the return of the Kimchi premium amid a weakening market is a red flag for Bitcoin’s near-term prospects.
Generally, the crypto market has been in turmoil, with over $2.23 billion in liquidations in the past 24 hours. As earlier by Coinspeaker, this was triggered by U.S. President Donald Trump’s announcement of new tariffs on imported goods. Canada, Mexico, and China are the major focus.
The news sparked a massive sell-off across risk assets, with investors reacting swiftly and driving market volatility. On-chain data revealed that 730,836 traders were liquidated, with long positions suffering the most.
Sadly, a whopping $1.88 billion of the total trading was wiped out, while short liquidations reached $358 million. , the world’s largest crypto exchange, experienced the largest single liquidation order, with a $25.64 million Ethereum/Bitcoin trade forcibly closed.
The liquidations highlight the extreme market volatility, worsened by geopolitical uncertainties.
Bitcoin (BTC) Price Outlook: Trouble Ahead?
Bitcoin price has plunged 4.21% in the past day, trading by $95,265. According to market data, its market cap has fallen to $1.88 trillion.
Technical indicators show a bearish trend, with the Relative Strength Index (RSI) in oversold territory. While the Moving Average Convergence Divergence (MACD) indicator also signals downside pressure
Immediate support is at $92,500, and if broken, BTC could fall to $90,000, with analysts pitching a 22% chance of dropping to $75,000 by March. Resistance is $96,000, with a key level at $98,500 for a potential recovery.
However, if historical patterns hold, extreme fear and oversold conditions could set the stage for a surprising rebound. Notably, this is hinged on whether buyers regain confidence.