Bitcoin Breaks Out of Trading Range, Is a New Bull Market Starting?

6-Day Consecutive Rise as of the 23rd... Kimchi Premium at -0.29%
Impact of National Regulatory Risk Resolution... Overseas Markets Begin to Gain Momentum

[Asia Economy Reporter Gong Byung-sun] Bitcoin prices are breaking out of the box range and rebounding.

As of 8:25 a.m. on the 29th, Bitcoin recorded 46.13 million KRW, up 1.59% from the previous day. Since the beginning of this month, Bitcoin had been trapped in a box range of 37 million to 41 million KRW, showing little fluctuation. However, starting from the 23rd, it rose for six consecutive days, breaking out of the box range. It even rose to 47.49 million KRW at 8:33 p.m. the previous day.

This upward trend began overseas, not domestically. According to the cryptocurrency data analysis site Cryprice, the Kimchi premium recorded -0.29% on the 27th. The Kimchi premium refers to the price difference between domestic and overseas cryptocurrency exchanges, usually indicating that cryptocurrencies are traded at higher prices domestically. The Kimchi premium falling below zero means that overseas demand for cryptocurrencies is greater than domestic demand.

In fact, domestic investors did not participate in cryptocurrency investment as much during the six days Bitcoin was rising. According to the cryptocurrency market tracking site CoinMarketCap, as of 10 a.m. on the 28th, the 24-hour trading volume of the four major domestic exchanges (Upbit, Bithumb, Coinone, and Korbit) was about 7.6429 trillion KRW. On May 7, when the cryptocurrency market was at its peak popularity, the 24-hour trading volume of the four major domestic exchanges was 44.9716 trillion KRW.

The reason Bitcoin is regaining interest overseas is that national regulatory risks are being resolved. Until last month, China, which had been strongly pressuring the cryptocurrency market, has shown little movement this month. In May, the government of the Inner Mongolia Autonomous Region in China regulated not only cryptocurrency mining companies but also individuals or companies providing buildings or land. The People's Bank of China also declared it would track funds related to cryptocurrency exchanges.

As the Kimchi premium fell below zero, expectations are growing that the cryptocurrency market will boom again. This trend is similar to earlier this year when overseas cryptocurrency prices rose first, followed by domestic participation. In February, when Bitcoin rose from the 30 million KRW range to 60 million KRW, the Kimchi premium dropped to -6.33%. However, from March, domestic interest in the cryptocurrency market increased, and the Kimchi premium did not fall below zero. In April, when Bitcoin reached its all-time high of 81.99 million KRW, the Kimchi premium rose to 22.58%.

However, there are also warnings to be cautious about investment. Professor Hong Ki-hoon of the Department of Business Administration at Hongik University advised, "The Kimchi premium falling below zero is due to the domestic investors' tendency to seek volatility, so it is not a special phenomenon," and added, "It is risky to predict future trends based on past data."

This content was produced with the assistance of AI translation services.