Bitcoin

Why are Bitcoin whales selling in Korea?

Some Bitcoin (BTC) whales in South Korea have been selling large volumes through major exchanges over the past week. Data shows that Bithumb has seen multiple deposits of $ 100 million in the past three days alone.

In terms of volume, South Korea has a much smaller market for cryptocurrency exchanges than the United States. However, The South Korean crypto exchanges have made large entries, comparable to other major markets.

Large listings often indicate pressure to sell from whales as wealthy investors fail to hold their stocks. When capital enters a trading platform, it indicates an intention to sell.

One-day candlestick chart for the BTC / USDT pair (Binance). Source: TradingView.com

Return of the “cousin kimchi”

Why are Bitcoin whales selling in Korea?
Why are Bitcoin whales selling in Korea?

After they were discovered Korbit had two deposits of $ 100 million to Bithumb and one deposit of $ 90 million on Jan. 9.

According to CryptoQuant warnings 2,098 BTC valued at $ 84 million were deposited with Korbit at 11:42 a.m. KST.

Due to the discrepancy between the daily volume of the South Korean exchanges and the major US or international exchanges Inflows above $ 50 million are often viewed as unusually large deposits.

CoinMarketCap data shows this Korbit 21st place on the world market by daily volume, Processing of $ 44 million daily transactions.

So, A deposit of $ 84 million in a single day is an unusually large depositAccording to CoinMarketCap, the exchange trades around $ 44 million a day.

The most likely reason for the continued listing on South Korean exchanges is arbitrage.

In December 2017, when the price of Bitcoin in South Korea topped $ 20,000 for the first time, trading in the dominant cryptocurrency was sometimes 20% higher, a value known as the “kimchi premium”.

Korea Premium Index. Source: CryptoQuant

In recent weeks Bitcoin trading on South Korean exchanges was up about 5%. These could have encouraged whales to broker the premium resulting in massive entries.

However, arbitration of the premium in South Korea is not easy. South Korea has strict restrictions on the outflow of capital from the country. Foreigners are also not allowed to trade on local cryptocurrency exchangeswhich makes it even more difficult.

So that the arbitration process works efficiently, Whales outside South Korea would have to deliver BTC to local traders and work as a team to achieve this.

Overall, whales exert immense pressure

Cointelegraph reported on it on January 8th “Mega Whales” were selling large amounts of BTC when the price of Bitcoin first surged over $ 40,000.

Even if Bitcoin fell from $ 40,000 to around $ 36,000, Many of the large whales continued to sell aggressively and lowered the price.

In the short term, the pattern of whales benefiting from it and new US buyers hoarding Bitcoin should continue. But The biggest variable that could change market dynamics is the strength of the US dollar, i.e. the Dollar Strength Index (DXY)..

Analysts at Decentrader, a platform for cryptocurrency traders, said so Bitcoin’s HODLing activity is increasing, which in the medium term could offset the rise in the dollar. they said::

Wave of one-year bitcoin stocks.

Displays the percentage of coins that will be kept for 1 year or more

It is currently 58% after a price of double.

The cycle after twice the histotic maximum had the same value; Investors do the same.

About 5% of Hodl’s 1-year coins were thrown away.

Philip Swift, Bitcoin trader and creator of Lookintobitcoinwarns that the market is reaching overheating levels.

MVRV Z score. Source: Twitter @PositiveCrypto

Although the signal of a market capitalization of over USD 40,000 has not yet occurred, the picture is drawing closer.or. Fast said::

“We can see that when the pDisregard z enters the red zone and signals a market peak. We’re not there yet, but a few more days of parabolic price development and we will be. I’m watching it closely. “

Swift also explained this to Cointelegraph in comments Although the rally is overheating, a big pullback is unlikely.

“I think a 30% retracement from here is pretty unlikely,” he said. “I think the rate we have reached is reaching the point where the price of bitcoin may need to slow down soon. As soon as bitcoin starts swinging, altcoins will follow suit.”

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