Bitcoin (BTCwhales in South Korea have sold a lot at major fairs over the past week. Records show that multiple $ 100 million deposits to Bithumb have been spotted in the past three days alone.
In terms of volume, South Korea has a much smaller cryptocurrency exchange market compared to the United States. Still, South Korea’s cryptocurrency exchanges have seen massive inflows comparable to other major markets.
High stock market inflows typically indicate selling pressure from whales, as wealthy investors do not hold their holdings on exchanges. Therefore, when capital flows to a trading platform, it shows an intention to sell.
Refund of the “Kimchi” premium
After two $ 100 million deposits to Bithumb were spotted, Korbit saw a $ 90 million deposit on January 9.
According to CryptoQuant Alerts, 2,098 BTC worth $ 84 million were deposited into Korbit at 11:42 am KST.
Due to the discrepancy between the daily volume of the South Korean exchanges and the major US or international exchanges, inflows in excess of $ 50 million are often considered unusually large deposits.
Data from CoinMarketCap shows that Korbit ranks 21st in the global market by daily volume, processing $ 44 million in transactions daily.
Therefore, a deposit of $ 84 million in one day is an abnormally large deposit as the exchange is trading approximately $ 44 million per day, per CoinMarketCap.
The most likely reason behind the continued inflows into South Korean stock markets is arbitrage.
In December 2017, when Bitcoin first surpassed $ 20,000 in South Korea, the dominant cryptocurrency was sometimes trading about 20% higher, which became known as the “Kimchi bounty.”
In recent weeks, Bitcoin has been trading about 5% higher on South Korean exchanges. This could have encouraged whales to arbitrate the premium, causing massive inflows.
However, brokerage of the premium in South Korea is not easy. South Korea has strict restrictions on the exit of capital outside the country. Foreigners are also not allowed to trade on local cryptocurrency exchanges, which makes it all the more challenging.
For the arbitrage to work efficiently, whales outside of South Korea would have to supply BTC to local traders and work as a team to get it done.
Whales generally exert enormous pressure
On January 8, Cointelegraph reported that “mega whales” were selling large amounts of BTC when Bitcoin’s price first rose above $ 40,000.
Even as Bitcoin fell $ 40,000 to about $ 36,000, many large whales continued to sell aggressively, bringing the price down.
In the short term, the pattern of whales making a profit and new buyers from the US collecting Bitcoin should continue. But the biggest variable that could change market dynamics is the strength of the US dollar, or the USD strength index (DXY).
Analysts at Decentrader, a platform for cryptocurrency traders, said Bitcoin’s HODLing activity is on the rise, which could offset the thread of the rising dollar in the medium term. He said:
Bitcoin 1 year Hodl Wave.
Shows the% of coins kept for 1 year +
Currently, 58% was after a 2x in price.
Last cycle at 2x ATH was the same value; investors behave the same.
– Decentrader (@decentrader) January 8, 2021
Philip Swift, Bitcoin trader and creator of Watch inobitcoin, meanwhile, warns that the market is reaching overheated levels.
While the mark of a market top above $ 40,000 is not necessarily present here, it is nearing the peak. Fast said:
“We can see that when the z-score enters the red zone, it indicates a market top. We are not there yet, but there are still a few parabolic days for the price and we will be. . “