Bitcoin Korea Premium Index Shows Signs of Selling, Pullback Soon?
On-chain data shows that the Bitcoin Korea Premium Index has shown signs of selling pressure, which could lead to a pullback.
The Bitcoin Korea Premium Index has turned red in recent days
As pointed out by an analyst in a CryptoQuant post, selling pressure has increased in the sector recently. The “Korea Premium Index” is an indicator that measures the difference between the Bitcoin price quoted on the South Korean exchanges and that quoted on foreign platforms.
When the value of this calculation is positive, it means that the price of the cryptocurrency listed on the South Korean stock exchanges is currently higher than on the global ones. Such a trend suggests that there is a greater amount of buying taking place on the former platforms right now compared to the latter (or alternatively, the Korean exchanges are just observing lower selling pressure).
On the other hand, the indicator showing a negative value suggests that South Korean investors can sell more of the cryptocurrency compared to the rest of the world’s user base.
Now, here is a chart showing the trend of the Bitcoin Korea Premium Index over the past few months:
The value of the metric seems to have been quite red in recent days | Source: CryptoQuant
As shown in the graph above, the Bitcoin Korea Premium Index has been very positive during most of the rallies in recent months, suggesting that users of the South Korean exchanges have been buying strong cryptocurrency through the price rally.
This constant buying pressure from these holders may be one of the reasons why the asset has been able to maintain an upward trajectory in recent months.
However, there have also been a few instances where the indicator’s value has turned negative and the global investors have surpassed this cohort in terms of buying pressure.
The most notable recent instance of this trend was when Bitcoin broke above the $31,000 mark a few days back. The asset topped out above this level as the Korea Premium Index turned red, suggesting that it may be the selling by these holders that led to the coin’s fall.
Many of the other instances of the metric showing negative readings this year have also provided resistance to the asset. Recently, the indicator has turned red again, suggesting that these investors may have started to distribute once more.
The bearish effect from these red values did not immediately appear as the price actually started to climb and crossed the $30,000 mark shortly after. Over the past 24 hours, however, this recovery has disappeared as the asset has plunged sharply below this level again.
It is uncertain whether this decline was all there was to come due to the selling pressure from the Korean investors, or whether the cryptocurrency will face more pullback in the near term.
BTC price
At the time of writing, Bitcoin is trading around $29,100, down 3% in the last week.
Looks like BTC has plunged during the past day | Source: BTCUSD on TradingView
Featured Image by mana5280 on Unsplash.com, Charts by TradingView.com, CryptoQuant.com
