After hitting a record $2 trillion valuations, the cryptocurrency market has lost nearly 6% in the last few hours as the Kimchi premium in South Korea finally loses steam. In few hours, the overall crypto market has lost more than $100 billion and is currently at $1.86 trillion.
Bitcoin has lost 3.75% and has slipped below $56,500 after holding $57K for quite some time. However, much of the damage has happened in the altcoin space which has been doing fantastic over the last week. The altcoin space alone has contributed to 80% market correction losing nearly $80 billion in less than 24 hours.
Kimchi premium is dropping significantly.
— CryptoQuant.com (@cryptoquant_com) April 7, 2021
On the other hand, CryptoQuant CEO Ki-Young Ju confirmed that the trading volumes on South Korean exchanges like Upbit Global and Bithumb Global have shot significantly. Thus, he adds that the crypto market drop is related to ‘Kimchi pullback’.
It seems someone finally figured out how to arbitrage this Kimchi premium opportunity.
— Ki Young Ju 주기영 (@ki_young_ju) April 7, 2021
Adding further evidence to Kimchi arbitrage, Ju writes:
“@BithumbOfficial, one of the largest exchanges in Korea, $BTC inflow mean has been increasing while all exchanges’ is decreasing. It seems some whales are depositing BTC to Korean exchanges”.
Interestingly, this was for the first time that the Kimchi premium returned back to the crypto market after the bull run of 2018. Yesterday, the Kimchi Premium had gone 20% high taking BTC price on Korean exchange to above $70,000.
Heavy Selling In the Altcoin Space
The altcoin space which has been busting over the last week has witnessed heavy selling today. Ethereum (ETH) has corrected 8% slipping below its crucial support of $2000. Binance Coin (BNB has lost 10% after hitting its all-time high of $412 earlier today.
Ripple’s XRP which has been much in the news has crashed 15% moving below $0.90. Polkadot (DOT) has lost 14%, Uniswap (UNI) has lost 9% and Litecoin (LTC) has lost 4.5%.
So far in 2021, the cryptocurrency market has performed phenomenally well. As per the latest CoinShares report cited by Reuters, crypto inflows were at a record $4.5 billion during Q1 2021 suggesting massive institutional participation. Without any doubt, Bitcoin (BTC) has the most inflows at $3.5 billion with Ethereum (ETH) attracting $765 million.