Traders ‘Buy the Dip’ as Bitcoin Drops Below $88K, Kraken Reports
Bitcoin (BTC) traders are taking advantage of the price dip, pushing the perpetual futures long-short ratio higher, according to Kraken’s head of derivatives, Alexia Theodorou.
Despite BTC slipping to a three-month low below $88,000, traders on Kraken—one of the top 10 cryptocurrency exchanges—are increasing their long positions, Theodorou told CoinDesk.
The downturn comes as Nasdaq futures signal continued risk aversion on Wall Street and the Japanese yen, a traditional safe-haven asset, remains strong against the U.S. dollar and commodity-linked currencies like the Australian dollar.
Bitcoin’s decline follows a $1 billion surge in open futures positions on Binance late Monday, likely fueled by traders shorting the asset in anticipation of further downside.
However, bargain hunters on Kraken have stepped in, pushing the perpetual futures long-short ratio to a record high of 0.8. This metric reflects the balance between buy and sell positions in the market at a given time.
“Despite bitcoin dipping below $90K, Kraken has seen a significant uptick in traders opening long positions in BTC perpetual markets,” Theodorou said. “The long-short ratio has reached an all-time high of ~0.8, while open interest has climbed to a four-week high. This indicates that traders may be positioning for a rebound, effectively ‘buying the dip.’”
While the increase in long positions suggests bullish sentiment, the long-short ratio remains below 1, meaning short positions still outnumber longs.
“This record long-short ratio reflects optimism, but liquidations are still at normal levels, signaling that excess leverage persists in the system. As a result, the market remains vulnerable to potential downside risks, including a long squeeze in the near term,” Theodorou cautioned.
