BTC Crashes Below $88K—But Kraken Traders Are Buying Big

Despite the ongoing sell-off, traders are showing surprising confidence. According to Alexia Theodorou, head of derivatives at the platform, there has been a sharp rise in the ratio of long to short positions on futures contracts. This suggests that many traders are doubling down on long positions, even as the market struggles and the positive funding rate forces them to pay fees to maintain their positions.

Despite bitcoin's price dropping below $90K, Kraken has seen a surge in traders opening long positions on its BTC perpetual markets. The long/short ratio has climbed to a record high of ~0.8, while open interest has reached a four-week high. This suggests traders could be anticipating a rebound and effectively ‘buying the dip,

Alexia Theodorou expresses.

Yet, short sellers still dominate, as the ratio remains below one. CoinGlass data shows that total liquidations have surpassed $1.48 billion. In Alexia’s assessment, these figures align with typical sell-offs, meaning the market is still burdened by excessive leverage.

Check this out: Who Holds the Most Bitcoin? January 2025 Update  

Kraken, one of the largest U.S. crypto exchanges with international reach, serves as a strong market barometer, making its data a key reference point for industry trends. Bitcoin’s decline below $88,000 unfolded in parallel with a U.S. stock market correction, as Wall Street traders moved to de-risk their portfolios. What’s behind their cautious approach? Our in-depth report has the answers.