Bitcoin’s Key Indicator Flashing Bullish Again, Mirroring Pre-5K Breakout
The return of a previously well-known phenomenon to Bitcoin this week continues to excite traders as Bitcoin price pushes above $5250.
Return Of The ‘Kimchi Premium’
Spotted online by social media traders, the so-called ‘Kimchi Premium’ – a surcharge on the Bitcoin price specifically impacting South Korean investors – is making a comeback on local cryptocurrency exchanges.
BTC/USD 00 shot up over $1300 last week to hit a local high of $5330. After a slight reversal, momentum reappeared to take the pair above $5000 and hold it in an area around $5200 ever since.
This, while delighting many who are eager to call a definitive ‘bottom’ in bitcoin price, has led to uneven spreads across exchanges.
As Bitcoinist reported, it was China that led the trend this month, with the country’s traders paying extra for acquiring stablecoin Tether (USDT), their main entry point into Bitcoin and other cryptocurrencies in a highly restricted market.
South Korea’s Kimchi Premium, which presents as a markup on Bitcoin price asks directly, is now following suit, leading some to draw comparisons to previous bullish Bitcoin activity.
The pattern first emerged in late 2017 as BTC/USD aimed for its all-time high over $20,000. Thereafter, the Premium came and went, most recently last October, before Bitcoin’s descent to recent lows of $3100.
BTCKRW: Korean premium is appearing again. Just like before the surge from 4k to 5k.$BTC #bitcoin $btcusd pic.twitter.com/m2n0lvxQn8
— CryptoHamster (@CryptoHamsterIO) April 10, 2019
In its latest incarnation, according to data from South Korean exchange Korbit, the premium is leading Koreans to pay 6.05 million won per bitcoin, against a USD price of $5230. This represents a markup of around 1.5 percent.
Woo Analysis Suggests Bottom Is In
Meanwhile, further evidence bitcoin price may have bottomed out in the past months has come from independent analyst Willy Woo. In an update to his Woobull blog, Woo extended his Bitcoin price measurements in an attempt to place its recent lows in context.
His latest metric, Cumulative Value Days Destroyed (CVDD), focuses on transactions, and is remarkably accurate when applied to previous bear market lows.
“When a HODLer sells to another HODLer the transaction contains both value (USD) and a length of prior HODL time,” he explained.
CVDD is the cumulative sum of this value and time destruction for every on-chain transaction (adjusted by age of market which brings the units back into USD).
If Woo is correct, the latest bottom should already be behind Bitcoin, with the surge above $5000 the start of a fresh longer-term uptrend.
As Bitcoinist noted, however, not everyone is convinced, with veteran trader Tone Vays this week leading calls to treat the latest Bitcoin price performance with skepticism.
What do you think about the return of the Kimchi Premium and Willie Woo’s model? Let us know in the comments below!
Images via Shutterstock, woobull.com
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