Bitcoin prices trading higher or lower than global spot market values usually signal that something could be amiss. In this case, a Bitcoin correction has been predicted by analyzing the Korean “Kimchi” premium and the Coinbase negative premium.
Bitcoin prices have retreated by 11.5% since their ETF-induced 21-month peak of $48,500 on January 11. However, this was largely expected by most analysts, and further signals suggest a larger market correction could be imminent.
Bitcoin Correction Chances
On January 15, on-chain analytics provider CryptoQuant reported that the Bitcoin Korea Premium Positive and the Coinbase Premium Negative suggested a short-term correction.
It provided a historical chart showing that when the Korea Premium overheats by more than 3% and the Coinbase Premium turns negative, “It means that US investors are selling and South Korean investors are buying Bitcoin competitively.”
Historically, the premium divergence has signaled a short-term correction in a bull market and the start of a bear market at the top.
“However, we are currently in a recovery or bull rally phase, so a short-term correction is more likely.”
Read more: Top 7 Platforms To Earn Bitcoin Sign-Up Bonuses in 2024
The analysts added that there have been three such signals in a row since mid-December. In late December, BeInCrypto reported that the Kimchi premium was signaling a local market top. BTC has tested resistance above $47,000 several times since then and failed to break through.
Moreover, the analysts observed increased deposits into Bitcoin exchanges by whale investors and miners. This, in addition to some selling of Grayscale Bitcoin Trust shares, is:
“Increasing the likelihood of a pullback and sideways movement in the near term, rather than a price increase.”
On January 15, BeInCrypto reported that there could be another big leverage flush on derivatives exchanges such as Binance. This could result in a 20-30% correction, pushing BTC prices back below $40,000.
BTC Price Outlook
Bitcoin is currently trading flat on the day at $42,843 at the time of writing. Furthermore, it has remained sideways since its weekend fall to this price level.
The asset made a move above $43,000 in late trading on January 15, but it was unsustainable.
Aside from the brief spike on the ETF approval news, BTC has been in a sideways chop since the beginning of December.
There is currently solid support around the $37,000 price zone, which would be a 24% correction should it materialize.
Trusted
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
