Kimchi Premium Returns: Bullish Bitcoin Breakout Imminent?
South Korean Market Premium Returns
In a tweet published on April 9, 2019, CryptoHamster, a bitcoin analyst evidenced the appearance of elevated BTC prices in South Korean exchanges. This phenomenon, known as the Kimchi Premium, characterized the onset of previous bullish activity for BTC.
The Kimchi Premium first emerged in early 2017 when South Korean BTC traders had to pay a ten percent markup for bitcoin on local exchanges. By the Summer of 2017, the premium had risen to about 20 percent.
When the massive BTC bull run occurred in late-2017, the Kimchi Premium had spiked to more than 50 percent. Such was the effect of the premium and the high volume of trading activity in the country that when CoinMarketCap removed South Korean trading volume from its figures in early 2018, the market appeared to crash.
However, data from the four major South Korean exchanges – Coinone, Bithumb, Upbit, and Korbit, shows a steadily developing markup on BTC price when compared with the global average. As at press time, this premium stands at 1.5 percent.
If history repeats itself, the emergence of the Kimchi Premium could be the precursor to another bull run. As previously reported by BTCManager, the Kimchi Premium caused altcoins to trade at a 600 percent premium in August 2018.
The return of the Kimchi Premium could also likely cause renewed headaches for regulators in the country. Back in September 2018, the Bank of Korea called for more robust market surveillance to tackle the issue of significantly higher price markups in the South Korean cryptocurrency arena.
Bitcoin Set for Parabolic Breakout?
With bitcoin maintaining the $5,000 price level despite a few pullbacks, some commentators believe that BTC is set for another parabolic breakout. Tweeting earlier in April 2019, Peter Brandt expressed optimism that BTC could be entering a new parabolic phase.
Back in January 2018, the veteran trader accurately called the 80 percent BTC price plummet in 2018. However, Brandt says bitcoin could reach $50,000 in this new bullish phase.
If Brandt’s forecast turns out to be accurate the top-ranked cryptocurrency may set a new all-time high beating the current record of $19,700 set in mid-December 2017.