Bitcoin dropped below $88K, with traders on Binance increasing short positions in anticipation of further declines.
Kraken traders are “buying the dip”, pushing the long-short ratio to a record high of 0.8.
Despite bullish sentiment on Kraken, high leverage remains, raising the risk of a potential long squeeze.
Bitcoin dropped to a three-month low on Monday, sliding below $88,000, as Wall Street risk aversion picked up and the yen held strong against the U.S. dollar. Traders on Binance rushed to short BTC, with open interest spiking by $1 billion, anticipating further downside.
While some traders are stacking shorts elsewhere, bargain hunters are stepping in on Kraken, pushing the BTC perpetual long-short ratio to a record high of 0.8.
More long positions are being opened than ever before, but the ratio is still below 1, meaning there are more shorts than longs overall.
Open interest on Kraken hit a four-week high, indicating renewed optimism.
Head of derivatives Alexia Theodorou says traders are actively buying the dip, betting on a rebound.
“Despite bitcoin’s price dropping below $90K, Kraken has seen a surge in traders opening long positions,” Theodorou told CoinDesk.
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