Bitcoin (BTC) whales in South Korea were traded on major stock exchanges last week. The data shows that in the past three days alone, several $ 100 million worth of deposits were discovered on the Bithumb website.
In terms of size, the cryptocurrency market in South Korea is much smaller than it is in the United States. However, the South Korean cryptocurrency exchange is seeing massive inflows, compared to other major markets.
Large flows into stock markets usually indicate sales pressures, as high net worth investors do not hold their assets on exchanges. Therefore, when the capital enters the trading platform, it shows selling intent.
Kimchi Award Response
After discovering two $ 100 million deposits in Bithumb on January 9, Korbit received a $ 90 million deposit.
According to CryptoQuant Alerts, 2,098 BTC valued at $ 84 million was transferred to Korbit at 11:42 KST.
Due to the discrepancy between the daily volume of South Korean stock markets and large US or international stock exchanges, inflows in excess of $ 50 million are unusually large deposits.
CoinMarketCap data shows that Corbit ranks 21 in the world by daily volume, processing $ 44 million in trades per day.
Therefore, a one-time deposit of $ 84 million is an unnaturally large deposit given that the exchange is around $ 44 million per day on CoinMarketCap.
The most likely reason for the continued flow of South Korean stock exchanges is arbitrage.
In December 2017, when bitcoin crossed $ 20,000 for the first time in South Korea, the sometimes dominant cryptocurrency traded 20% higher in what became known as the “kimchi premium”.
Bitcoin has been trading up around 5% on South Korean exchanges in recent weeks. That would have forced the whales into arbitrage over the prize, leading to massive inflows.
However, determining the award in South Korea is not easy. South Korea has strict restrictions on capital travel outside the country. Foreigners are also not allowed to trade on local cryptocurrency exchanges, which further complicates the task.
For arbitrage to work effectively, whales outside of South Korea must hand over BTC to local dealers and work as a team to achieve this.
Whales generally exert tremendous pressure
On January 8, Cointelegraph reported that megakits were selling large amounts of Bitcoin when the bitcoin price exceeded $ 40,000 for the first time.
Even with Bitcoin dropping $ 40,000 to around $ 36,000, many of the big whales continued to sell aggressively, driving the price down.
In the short term, the picture of profitable whales and new American buyers accumulating bitcoin should continue. But the biggest variable that can change market dynamics is the strength of the US dollar, which is the Dollar Strength Index (DXY).
Analysts at Decentrader, a platform for cryptocurrency traders, said that HODLing activity in Bitcoin is on the rise, which may offset the thread of dollar growth in the medium term. He said:
Meanwhile, Philip Swift, bitcoin trader and creator of Lookintobitcoin, warns that the market has reached overheating levels.
Although the mark in the market reaching a peak above $ 40,000 has not yet reached its peak, it is close to the peak. Swift said:
“We see that when the z-Score enters the red, it indicates a market halt. We haven’t reached that level yet, but we will reach another few days in the parabola and will reach it. I am following this very closely.”