Bitcoin

The disappearance of key market players and a liquidity crisis contributed to a $30,000 drop in Bitcoin prices on South Korean platforms after President Yoon Suk Yeol’s declaration of martial law.
On Dec. 3, Yoon <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/upbit-btc-krw-dipped-south-korea-martial-law" rel="" target="_self" text="null" title="https://cointelegraph.com/news/upbit-btc-krw-dipped-south-korea-martial-law">imposed martial law during a live television address</a>, citing a need to “eliminate anti-state elements” and address “threats posed by North Korea’s communist forces.”
The declaration triggered immediate market disruptions, with Bitcoin (<a data-ct-non-breakable="null" href="https://cointelegraph.com/bitcoin-price" rel="" target="_self" text="null" title="https://cointelegraph.com/bitcoin-price">BTC</a>) on the South Korean exchange Upbit dropping to as low as 92 million won (about $65,000).
<figure>
 <img alt="Politics, South Korea" src="https://s3.cointelegraph.com/uploads/2024-12/019391af-0d34-7913-b907-06bea69ec271" title="">
 <figcaption style="text-align: center;">
 BTC/KRW activity on South Korea-based crypto exchange Upbit. Source: Upbit
 </figcaption>
</figure>
One analyst attributed the sharp decline to a sudden disappearance of liquidity. According to trader Ltrd, the lack of active participants caused an imbalance between bids and asks, resulting in a 10% spread during the crisis.
<h2 id="lack-of-liquidity-sends-btc-to-65-000-in-south-korea">Lack of liquidity sends BTC to $65,000 in South Korea</h2>
In an X thread, trader Ltrd said the drop would not be this brutal if the liquidity was normal. Still, they said that during the martial law declaration, “all the players just disappeared from the market.” They <a data-ct-non-breakable="null" href="https://x.com/ltrd_/status/1864019403055985115" rel="null" target="null" text="null" title="null">wrote</a>:&nbsp;
<blockquote>
 “The reason is simple — it is shockingly hard to enter the Korean market and trade there. This means that only a few players can provide liquidity and arbitrage those discrepancies.”
</blockquote>
South Korean traders paid the price for limiting the market to only a few players, according to trader Ltrd, who said the price volatility could have been mitigated with broader market maker participation.
<figure>
 <img alt="Politics, South Korea" src="https://s3.cointelegraph.com/uploads/2024-12/0193918f-51e7-7ae9-a77b-9af5a3ec0fc0" title="">
 <figcaption style="text-align: center;">
 Sell and buy amounts on Upbit. Source: <a data-ct-non-breakable="null" href="https://x.com/ltrd_/status/1864019408768684087/photo/1" rel="null" target="null" text="null" title="https://x.com/ltrd_/status/1864019408768684087/photo/1">Ltrd</a>
 </figcaption>
</figure>
The trader also highlighted massive sell pressure on all instruments behind the sudden drop. Despite this, they said the market overreacted, and the extreme price drop would not have happened if more liquidity providers had been participating.
Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/south-korea-crypto-tax-delay-two-years-kdp" rel="null" target="null" text="null" title="null">South Korea’s Democratic Party agrees to delay crypto tax by 2 years</a>
<h2 id="south-korean-markets-recovered-back-after-martial-law-reversal">South Korean markets recovered back after martial law reversal</h2>
Hours after the martial law declaration, 190 lawmakers in South Korea’s parliament voted to <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/crypto-markets-bounce-back-south-korea-reverses-martial-law" rel="" target="_self" text="null" title="https://cointelegraph.com/news/crypto-markets-bounce-back-south-korea-reverses-martial-law">nullify the martial law declaration</a>. Yoon accepted the decision and lifted the order, easing tensions.
Following the reversal, Bitcoin prices rebounded, trading at around 135 million won (about $95,000) at the time of publication.
Market observers noted the temporary crisis highlighted the vulnerability of South Korea’s cryptocurrency markets to liquidity shocks, particularly during times of political instability.
Magazine: <a data-ct-non-breakable="null" href="https://cointelegraph.com/magazine/unique-amazing-south-koreas-cryptoverse/" rel="null" target="null" text="null" title="null">South Korea’s unique and amazing crypto universe</a>

Martial law causes Bitcoin crash to $65K in South Korea — Here’s why

Table of Contents

Cointelegraph

Other articles published on Dec 4, 2024

Tron Price Hits New ATH! TRX Price Targets $0.5 This Week?

Experts Predict Parabolic Breakout For Ripple (XRP) And WallitIQ (WLTQ) Over Meme Coins Like Doge...

Crypto YouTube hits a 12-month high at 4.72M weekly views as retail interest rekindles

Here’s Why Stacks (STX) Has Been ‘Booming Pretty Strongly’: Expert

Crypto’s December Dark Horse: Could This Blockchain Rival Solana and Ripple With Massive Gains Ah...

UK Authorities Expose Extensive Cryptocurrency Laundering Operation Tied to Criminals and Russian...

Join our free newsletter for daily crypto updates!