Bitcoin Korea Premium Index Turns Red, Falling Incoming?
Data shows that the Bitcoin Korea Premium Index has taken a negative value recently, which may lead to a decline in the asset’s price.
The Bitcoin Korea Premium Index has fallen to negative values recently
As pointed out by an analyst in a CryptoQuant post, previous 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 quoted on South Korean exchanges and that quoted on foreign platforms.
This metric helps us know if Korean investors are currently buying more or less of the cryptocurrency compared to investors living in other parts of the world.
When the value of the metric is positive, it means that the price quoted on the South Korean exchanges is higher than on the global exchanges right now. Such a trend implies that Korean owners apply 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 owners at the moment.
Now, here is a chart showing the trend of 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 graph above, 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 suggests that the Korean investors have participated in a greater number of purchases than the foreign investors.
Recently, however, the indicator has gradually decreased, which suggests that the buying pressure from this segment of the market has decreased. Coincidentally, the price of the cryptocurrency has overall moved sideways since this trend formed.
In recent days, the metric has now fallen enough to enter negative territory, which is a sign that the buying pressure may have now turned to selling pressure instead.
In the chart, the quant has marked the previous cases where the Bitcoin Korea Premium Index had assumed some strong negative values. It seems that 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 payout in the near future. However, the calculation still has only a small negative value so far, while the previous declines have generally come when the values have been much lower.
This could mean that if the Bitcoin Korean Premium Index does not decline further from here, the trend seen earlier may 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 at Unsplash.com, Charts from TradingView.com, CryptoQuant.com
