The Bitcoin price appears to have found a base at $8,000 as it seeks to recover to its mid-December high.
Bitcoin Price Finds a Base at $8,000
At this time last week, the Bitcoin price was neck-deep in the most precipitous market correction that the majority of cryptocurrency investors had ever experienced. By the end of the day, Bitcoin would plunge below $6,000 for the first time since November, leaving Bitcoin bears gleefully predicting the flagship cryptocurrency’s imminent demise.
That, of course, did not happen, and the Bitcoin price soon reversed trajectory and began to mount a recovery. By Feb. 7, Bitcoin had once again ascended past the $8,000 mark on cryptocurrency exchange Bitfinex, and — despite a few brief dips back into sub-$8,000 territory — it has held above that mark since.
Consequently, it appears that $8,000 has developed into a base for Bitcoin, perhaps indicating that the market has shaken out a large percentage of the weak hands who contributed to its recent decline.
However, Bitcoin has thus far been unable to break through resistance at $9,000, albeit for a brief period on Feb. 10. At the time of writing, Bitcoin was trading at $8,703 on Bitfinex, which was in line with the coin’s global average.
The Partial Return of the Kimchi Premium
One reason for Bitcoin’s recent recoveryThe global Bitcoin price has been bolstered in recent weeks by the return of moderate premiums at South Korean exchanges. The so-called “Kimchi Premium,” which had once priced cryptoassets as much as 25 or 30 percent above equivalent values on Western exchanges, had largely disappeared at the beginning of February following the implementation of new restrictions intended to cool the country’s heated local markets.
Included in these new rules was a prohibition on anonymous trading, which meant that all traders had to undergo KYC verification before they could resume trading. Many traders were slow to do this, perhaps because consumer interest had tapered in response to the recent market correction. However, BTC/KRW volume has gradually increased over the past two weeks as traders have verified their accounts and re-entered the markets, and this increased volume has been accompanied by a slight return of the Kimchi Premium.
At the time of writing, Seoul-based cryptocurrency exchanges Upbit and Bithumb each priced Bitcoin at about $9,100, which represented a roughly five percent premium over the coin’s global average, although these platforms accounted for just a combined four percent of total Bitcoin trading volume.