Bitcoin Kimchi Premium Spikes as DXY Strength Drives Market Trends  

• Bitcoin’s Kimchi Premium rose to 12% due to the impact of a stronger U.S. Dollar Index, not due to Korean demand.  
• Despite global sell-offs, Bitcoin showed resilience, only losing 3.5% and quickly recovering to $95,000.  
• The Coinbase Premium remained positive, signaling similar market trends outside of South Korea during the sell-off.

Bitcoin’s Kimchi Premium, the price gap between the cryptocurrency’s value on South Korean exchanges and international platforms, surged to 12%. This marks the highest level seen since early 2022. However, the cause of this spike isn’t tied to South Korean demand, as initially speculated. According to Ki Young Ju, the CEO of CryptoQuant, the rapid increase in the premium can largely be attributed to the stronger position of the U.S. Dollar Index (DXY).

Strong DXY Drives Bitcoin Price Movement

Aggravating this disparity is that the escalation of the premium did not share the same fate as the South Korean buyers becoming active in the market. Instead, it originated from the general market affection where Bitcoin was being translated to the US dollar implying the influence of the rising DXY. This strong dollar pushed Bitcoin’s price movements in local markets like South Korea, while trading in Korean won (KRW) stayed stable.

Limited Impact from Korean Market Activity

CryptoQuant’s analysis highlights that only a small portion of the upward pressure on Bitcoin’s price is linked to Korean traders. The market trend was influenced by global factors, particularly the impact of the DXY, and not by an increase in Korean purchasing activity. This insight sheds light on the fact that the Kimchi Premium’s rise was primarily driven by external market dynamics rather than a local surge in demand for Bitcoin in South Korea.

Coinbase Premium Also Reflects Similar Market Trends

Bitcoin’s market volatility led to continued positive Coinbase Premium values due to the price disparity on the BTC/USDT pair between Coinbase and Binance. The data showed parallel movements between Korean trading markets and outside markets that bore the sell-off effects. Bitcoin demonstrated strong performance during market-wide cryptocurrency declines as it managed to secure one of the highest positions among capitalization-driven assets that excluded stablecoins.

The stability of Bitcoin throughout this time of market instability demonstrates its powerful position relative to the marketplace losses. The crypto market experienced extensive market losses when it lost $280 billion in net capitalization during a single 24-hour period. The 3.5% price downfall of Bitcoin remained small relative to altcoins and other currencies since it recovered quickly to reach $95,000.