South Korea's won is experiencing a significant decline, marking it as the worst-performing currency in Asia this year. The won has depreciated by 2.5% against the US dollar, solidifying its position as the region's weakest currency.
The USD/KRW trading pair is currently situated at 1,472.8 at the time of this report, showing a slight decrease on the day but remaining precariously close to its all-time highs.
In comparison, other major Asian currencies are performing differently. The Singapore dollar is trading at 1.285 against the USD, the Chinese yuan is at 6.963, and the Indian rupee is near 90.819. Australia's dollar has seen a marginal gain, now at 0.67. Even the Thai baht has strengthened slightly, with the USD/THB pair dropping to 31.25, according to data from CNBC.
Bitcoin Prices Surge in South Korea Amidst Rising "Kimchi Premium"
While the South Korean won weakens, the price of Bitcoin is increasing within the country. The "kimchi premium," which measures the price difference of Bitcoin on Korean exchanges such as Bithumb compared to global exchanges like Binance, has now risen to +2.49%.
This indicates that South Korean investors are currently paying a higher price for Bitcoin than their international counterparts. In the previous year, the premium reached a local peak of 6.07%, a level that historically signals aggressive participation from Korean traders.
Analyzing the accompanying chart, particular attention should be paid to all trendlines when the kimchi premium surpasses 1.5%. This observation reveals a consistent correlation between the premium's movement and Bitcoin's upward trend breakouts, even during periods when Bitcoin was not experiencing significant rallies.
The breakout level is approximately $25,200, which coincidentally aligns with a notable spike in buy volume that occurred concurrently with the rise in South Korea's premium.
Current resistance is observed around the $28,754.40 mark, while strong support is established at $25,200. Further support zones are located at $18,060.58 and $16,540.00. Bitcoin has remained below the descending trendline originating from 2021, and its current trading price is just under this critical resistance level.
At present, the kimchi premium is neither excessively high nor low, standing at 2.49%, which is within its historical average range. This level is not indicative of an overheated market but remains strong enough to sustain the current bullish outlook. An increase in the premium above 4% or 6% would likely lead to further price appreciation. Conversely, a drop below 1% would signal a decline in Korean demand, potentially leading to a revisit of the $18,000 price range.