Bitcoin Traders Bet on Rebound as BTC Dips Below $88K, Kraken Data Shows

As Bitcoin (BTC) extends its decline to a three-month low, traders on Kraken are increasing their long positions, positioning for a potential recovery, according to Alexia Theodorou, Kraken’s head of derivatives.

BTC briefly dropped below $88,000 as risk aversion gripped global markets. Nasdaq futures signaled continued weakness in tech stocks, while the Japanese yen—considered a safe-haven asset—held firm against the U.S. dollar and other risk-sensitive currencies.

The price drop follows a surge in futures open interest on Binance, which rose by $1 billion late Monday, likely driven by an influx of short positions anticipating further downside.

However, Kraken traders appear to be taking the opposite approach. The perpetual futures long-short ratio on the exchange has climbed to 0.8, its highest level on record, indicating a growing preference for long positions over shorts.

“Even as Bitcoin trades below $90K, we’ve seen a sharp increase in long positions on Kraken’s BTC perpetual markets,” Theodorou told CoinDesk. “The long-short ratio is now at a record ~0.8, while open interest has risen to a four-week high, suggesting that traders are stepping in to ‘buy the dip.’”

Despite this optimism, the market remains tilted toward short positions overall, meaning downside risks persist.

“The rising long-short ratio points to a shift in sentiment, but with leverage still present, a long squeeze remains a possibility,” Theodorou cautioned. “If leveraged longs get liquidated, we could see additional volatility before any meaningful recovery.”