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BTC expected to find support around $48,900

Bitcoin’s price fell to a weekly low of $50,600 on Feb. 23, down 5% in the last three days, but a rare buying frenzy observed across Korean exchanges provides fresh market insights.  

Cryptocurrency exchanges in South Korean markets have witnessed an uptick in Bitcoin (BTC) trading this week. Historical trends suggest that this could significantly impact Bitcoin’s short-term price action. 

Korean investors increase buying pressure amid falling prices

Following a blistering 27% uptrend in the first half of February, Bitcoin’s price has struggled to sustain the momentum this week. After hitting a yearly peak of $52,985 on Feb. 20, BTC price has now tumbled 5% to a new weekly low of $50,600 at the time of writing on Feb. 23. 

Earlier this week, reported on South Korean political parties espousing pro-crypto policies favoring ETFs and delays on additional taxes. A rare buying trend has emerged among crypto investors in South Korean markets amid the falling Bitcoin price. 

However, historical trends suggest this could further exacerbate Bitcoin’s ongoing price dip. 

Bitcoin (BTC) Korean Premium Index vs. Price
Bitcoin (BTC) Korean Premium Index vs. Price | Source: CryptoQuant

CryptoQuant’s Korean Premium (KP) Index tracks the price gap between South Korean exchanges and other exchanges. Rising values suggest increased buying activity among Korean investors and vice versa. 

The KP index has spiked 400% from 1.03 to 4.54 between Feb. 14 and Feb. 23, coinciding with Bitcoin’s ongoing price correction. 

Historically, there has been a noticeable correlation between the BTC price and the Korean Premium Index. When the KP Index spikes, indicating heightened buying activity among Korean investors, Bitcoin’s price often experiences downward pressure or negative correlation. 

Bithumb, Upbit, Coinone, and Korbit are the leading crypto exchanges in South Korea, known as “The Big Four.” These platforms host 90% of all crypto assets held by the country’s residents, according to research

The long-term inverse relationship with BTC prices suggests that fluctuations in the Korean market can influence broader market sentiment and contribute to price volatility in the cryptocurrency ecosystem.

Bitcoin price prediction: BTC Can Find Support at $48,900  

If this rare negative divergence between Bitcoin price and Korean market activity repeats, BTC will likely dip below $50,000. Furthermore, with Bitcoin ETFs due to close trading for the week of Feb. 23, institutional demand for BTC will likely decline further in the days ahead.

Capitalizing on these critical factors, bears could make a brazen attempt to force a rapid downswing toward $45,000.

In this scenario, Bitcoin losing the $50,000 support could trigger a freefall toward the 20-day SMA price of $48,942. Considering the overall sentiment surrounding the crypto markets is still largely bullish, BTC bulls could mount a consolidation buy-wall at that key support level. 

Bitcoin (BTC) Price Prediction
Bitcoin (BTC) Price Prediction | Source: TradingView

On the other hand, Bitcoin could receive a demand surge from leveraged bullish investors looking to avert margin calls at the $50,000 level.  In this case, Bitcoin price could experience an upswing toward the next significant resistance at the $55,500 area, as depicted by the upper Bollinger Band indicator.

This surge in Bitcoin trading in Korean markets indicates a growing interest and adoption of cryptocurrencies in the region. The Big Four exchanges in South Korea have played a significant role in facilitating the trading of cryptocurrencies, providing a secure platform for investors to engage in the market. With research indicating that these exchanges hold a large portion of the country’s crypto assets, their influence on the market cannot be understated.

The correlation between Bitcoin prices and the Korean Premium Index sheds light on how market activity in a specific region can impact global cryptocurrency prices. This connection underscores the interconnected nature of the digital asset market and emphasizes the need to monitor various indicators to gauge market sentiment accurately.

Looking ahead, the price prediction for Bitcoin at $48,900 serves as a critical support level for investors to monitor. The potential for a downward trend could signal a shift in market dynamics, prompting investors to reassess their positions and risk management strategies. Conversely, a bullish scenario involving a price rebound to $55,500 highlights the resilience and demand for Bitcoin, showcasing the market’s ability to react to changing conditions.

As the cryptocurrency market continues to evolve, tracking regional trends and investor behavior in key markets like South Korea will remain crucial for understanding market dynamics and making informed investment decisions. The insights gained from analyzing market activity in specific regions can provide valuable information for traders and investors looking to navigate the volatile cryptocurrency landscape.

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