Bitcoin Traders 'Buy the Dip' as BTC Price Slips Below $88K, Kraken Says

Key Points

  • Crypto traders are buying bitcoin (BTC) on Kraken as the price slides to a three-month low.
  • The BTC decline follows a $1 billion increase in open futures positions on Binance, likely due to traders anticipating a deeper price drop.
  • Kraken's perpetual long-short ratio has reached a record high of 0.8, indicating more traders are betting on a price rebound.

Summary

Bitcoin's price has recently dipped below $88,000, influenced by broader market trends showing risk aversion on Wall Street and a strong yen against the U.S. dollar. Despite this decline, there's a notable trend of bargain hunting on Kraken, one of the largest cryptocurrency exchanges. Alexia Theodorou, head of derivatives at Kraken, highlighted that the exchange has seen a surge in traders opening long positions on its BTC perpetual markets, pushing the long-short ratio to a record high of approximately 0.8. This ratio, although still below 1, suggests a growing optimism among some traders who are betting on a price rebound. However, the market remains cautious with normal levels of liquidations, indicating potential vulnerability to further price drops due to excess leverage. This scenario could lead to a long squeeze in the near term, where the price might drop further due to the unwinding of leveraged long positions.

coindesk
February 25, 2025
Crypto
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