The price of Ethereum appears to be recovering nicely this weekend after a period of investor uncertainty. The “king of altcoins,” after what appeared to be an aggressive return above the $4,200 level earlier this week, is now lagging below the psychological $4,000 mark.
While Ethereum price has gained some positive momentum over the past day, the shadows of the October 10 slowdown still appear to be hanging over investor sentiment. A market phenomenon known as “Kimchi Premium” portends a tedious few weeks for the second-largest cryptocurrency.
What happened the last time Kimchi Premium saw a similar increase
In a recent post on social media platform X, market analyst CryptoOnchain revealed that Kimchi Premium has been increasing over the past few weeks. This observation is based on the movement of the Korea Premium Index on-chain indicator, which measures the price difference between South Korean exchanges and other global exchanges.
This metric, or “Kimchi Premium,” shows how much additional Korean traders are willing to pay for a particular cryptocurrency (Ethereum, in this case). When the index is positive, it means Korean retailers are willing to pay a premium for crypto assets. Meanwhile, a negative Korean Premium Index indicates that retailers are only willing to buy the cryptocurrency at a discount.
According to CryptoOnchain, the Korea Premium Index for Ethereum recently saw a notable rise to around 8.2%, its second highest level this year. The market analyst noted that this level of Premium Kimchi is a troubling sign, as it historically suggests extreme retail FOMO (Fear of Missing Out) and a high potential price.
Typically, whales tend to take advantage of the price gap by selling on Korean exchanges when the Korea Premium Index is rising. Due to increased selling pressure, Ethereum price now faces greater risk of correction.
For example, the last time ETH saw Kimchi Premium this high was in January, coinciding with the price dropping to around $1,500. With this in mind, investors should exercise caution as the odds of a sustained downtrend are significantly higher.
Ethereum price at a glance
At the time of writing, the ETH price stands at around $3,875, reflecting no significant changes over the past 24 hours. In what was supposed to be a bullish period for the cryptocurrency market, “Uptober” did not particularly meet investors’ expectations. After a positive start to the month, the price of Ethereum is currently down almost 10%.
