It seems that the Ethereum price will clearly recover over the weekend after a period of uncertainty among investors. The “altcoin king”, after making an aggressive move back above the $4,200 level earlier this week, is now lagging behind the psychological $4,000 mark.
Although Ethereum’s price has gained positive momentum over the past day, shadows of the October 10 downturn still appear to be weighing on investor sentiment. A market phenomenon known as “Kimchi Premium” suggests a uninteresting few weeks ahead for the second-largest cryptocurrency.
What happened last time Kimchi Premium saw similar growth
In a recent post on social media platform X, market analyst CryptoOnchain revealed that the price of Kimchi Premium has increased in recent weeks. This observation is based on the movement of the on-chain Korea Premium Index, which measures the price difference between South Korean exchanges and other global exchanges.
This metric, or “Kimchi Premium,” shows how much extra Korean traders are willing to pay for a specific cryptocurrency (Ethereum in this case). When the index is positive, it means that Korean retailers are willing to pay a premium for crypto assets. Meanwhile, the negative Korean premium index signals that retailers are only willing to buy the cryptocurrency at a discount.
According to CryptoOnchain, the Korea Premium Index for Ethereum has recently seen a noticeable boost to around 8.2%, which is the second highest level this year. The market analyst noted that this level of Kimchi Premium is a concerning sign because it has historically suggested extreme retail FOMO (fear of missing out) and a potential price peak.
Typically, whales take advantage of the price difference by selling goods on Korean exchanges when the Korea Premium Index rises. Due to increased selling pressure, the Ethereum price is currently at greater risk of correction.
For example, the last time ETH saw Kimchi Premium levels this high was in January, which coincided with the price dropping to around $1,500. With this in mind, investors should be cautious as the risk of a sustained downtrend is much higher.
Ethereum price at a glance
At the time of writing, ETH is trading at around $3,875, which does not reflect any significant changes in the last 24 hours. During the expected boom period on the cryptocurrency market, “Uptober” did not particularly meet investors’ expectations. After a positive start to the month, Ethereum’s price is now down by almost 10%.
