Ethereum price appears to be recovering well over the weekend after a period of uncertainty for investors. The “king of altcoins”, after what seemed like an aggressive return above the $4,200 level earlier this week, is now lagging below the psychological threshold of $4,000.
Although Ethereum price has seen positive momentum over the past day, the shadows of the October 10 decline still seem to weigh on investor sentiment. A market phenomenon known as “Kimchi Premium” suggests it will be a dull few weeks for the second-largest cryptocurrency.
What happened the last time Kimchi Premium saw a similar surge
In a recent post on social media platform X, market analyst CryptoOnchain revealed that Kimchi Premium has been on the rise in recent weeks. This observation is based on the movement of the on-chain indicator Korea Premium Index, which measures the price difference between South Korean exchanges and other global exchanges.
This metric, or “Kimchi Premium,” shows how much more Korean traders are willing to pay for a particular cryptocurrency (Ethereum, in this case). When the index is positive, it means that Korean retailers are willing to pay a premium for cryptocurrencies. Meanwhile, a negative Korean premium index signals that dealers are only willing to purchase the cryptocurrency at a discount.
According to CryptoOnchain, the Korea Premium Index for Ethereum recently saw a notable increase to around 8.2%, the second highest level this year. The market analyst noted that this level of Kimchi Premium is a worrying sign, as it historically suggests extreme retail FOMO (Fear of Missing Out) and a potential price ceiling.
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 is now facing a greater risk of correction.
For example, the last time ETH saw a Kimchi Premium this high was in January, coinciding with the price plummeting to around $1,500. With this in mind, investors may want to proceed with caution, as the chances of a sustained downtrend are significantly higher.
Ethereum price in brief
As of this writing, the price of ETH is around $3,875, with no significant change in the last 24 hours. In what was expected to be a bullish period for the cryptocurrency market, “Uptober” didn’t particularly live up to investor expectations. After a positive start to the month, the price of Ethereum is currently down by almost 10%.
