Key Points:
- Retail trading volume of XRP and DOGE on South Korea’s Upbit recently surpassed that of Bitcoin and Ethereum.
- A $1 billion short squeeze and expectations of U.S. interest-rate cuts fueled speculative frenzy.
- Easing U.S.-China trade tensions and potential tariff reductions revived risk-on sentiment.
- Institutional developments—such as pledges for spot crypto ETFs—and macroeconomic indicators underpin further upside.
- Traders are closely monitoring upcoming Fed decisions, geopolitical shifts, and technical breakout patterns.
Market Overview: Altcoins Outpace Majors
Over the past 24 hours, South Korea’s largest crypto exchange, Upbit, recorded over $250 million in trading volume each for XRP/KRW and DOGE/KRW, eclipsing Bitcoin’s and Ethereum’s trading volumes, which stayed below $180 million. This remarkable shift mirrors a broader rally in altcoins, with XRP and DOGE both rallying more than 15 percent over the past week, compared to Bitcoin’s 10 percent gain and Ethereum’s nearly 40 percent surge—their strongest weekly performance since 2021.
Korean retail investors have historically served as a global sentiment indicator, driving waves of volatility during the so-called “Kimchi Premium” era. The current enthusiasm is especially pronounced in meme and utility tokens, marking a departure from Bitcoin-centric trading that dominated local markets earlier this year.
Drivers of the Altcoin Surge: Short Squeeze and Speculation
Market participants attribute the sudden uptick to a $1 billion forced liquidation of short positions, which ignited a classic short squeeze across Korean exchanges. “This was a highly one-sided short squeeze,” noted Augustine Fan of SignalPlus, pointing out that Ethereum ETF inflows were negligible, suggesting the event was purely a position adjustment, not an institutional buying spree.
The speculative fervor was further amplified by technical breakouts evident in chart patterns for XRP and DOGE, attracting momentum traders seeking quick gains. Solana (SOL) also surged 85 percent over four weeks, as traders bet on a $200 price breakout, highlighting that this rally extended beyond just meme coins.
Comparing XRP & DOGE with Bitcoin and Ethereum
While Bitcoin and Ethereum retain their status as market bellwethers, their recent gains of 10 percent and 40 percent respectively are overshadowed by altcoins in South Korea. Bitcoin briefly topped $104,000 before settling around $102,400 amid profit-taking and caution ahead of U.S. inflation data. Ethereum’s nearly 40 percent rise places it only slightly ahead of altcoins, but XRP and DOGE’s local performance underscores divergent trader preferences in the region.
XRP’s trading price hovered around 3,405 KRW, up 3 percent in the last day, while DOGE jumped 8 percent in the same period, signaling pronounced retail appetite for high-volatility tokens. This pattern echoes previous cycles when South Korean speculators chased outsized returns during risk-on phases.
Geopolitical and Macro Drivers
A pivotal catalyst has been the significant easing of U.S.-China trade tensions. On May 12, officials agreed to slash tariffs on selected goods from 145 percent to 30 percent for 90 days, reinvigorating risk assets across equity and crypto markets. Additionally, encouraging U.S. macroeconomic indicators hint at potential rate cuts later in 2025, bolstering risk-on sentiment.
Jeff Mei, COO of BTSE, argued that a follow-through dovish pivot from the Federal Reserve could propel Bitcoin to new all-time highs and attract renewed capital flows into crypto, further underpinning altcoin momentum.
Institutional and Regulatory Trends
Institutional developments have also shaped the backdrop. South Korea’s ruling party unveiled plans to legalize spot crypto ETFs, signaling regulatory maturation and greater institutional participation. Globally, Ethereum ETF inflows remain subdued in Asia, but U.S. interest in such products hints at future cross-border capital allocations that could underpin altcoin strength.
Moreover, Coinbase’s policy shift towards pro-crypto initiatives in the U.S. is creating a more favorable environment for institutional adoption, which could spill over into Asian markets given the interconnected nature of digital asset flows.
Technical Outlook and Future Catalysts
Technically, XRP’s breakout above key resistance levels around 2.26 USD suggests potential for a run towards $3, though spot net outflows on Korean platforms since mid-April highlight pockets of selling pressure that may temper gains. DOGE’s rally likewise faces critical momentum tests around its all-time highs, with traders watching for continuation patterns or signs of exhaustion.
Upcoming catalysts include the Fed’s June policy announcement, which will likely dictate the broader risk-asset trajectory, and any confirmation of South Korea’s ETF legalization framework. Geopolitical developments—especially any reversal in U.S.-China trade talks—could swiftly alter market orientation.
Conclusion
South Korea’s retail investors have once again demonstrated their outsized influence on altcoin markets, driving XRP and DOGE trading volumes past Bitcoin and Ethereum on the back of easing trade tensions, a dramatic short squeeze, and dovish monetary expectations. While technical breakouts and emerging regulatory clarity support further upside, traders must remain vigilant to macroeconomic data releases, central bank decisions, and geopolitical shifts that could reshape the risk-on environment. As altcoin season gathers steam, the coming weeks will prove critical in determining whether this rally can sustain its momentum or if profit-taking pressures will reassert dominance.
