BTC Traders Increase Activity on Kraken as Prices Fall Below $88K
Traders are ‘buying the dip’ on Kraken as Bitcoin’s price fell below $88,000. The perpetual futures long-short ratio has risen to a record of 0.8, indicating increased buying interest. Despite this bullish sentiment, the ratio remains below 1, suggesting more shorts than longs, which may indicate ongoing market vulnerability.
In a recent statement to CoinDesk, Alexia Theodorou from Kraken reported an uptick in traders buying Bitcoin (BTC) as the cryptocurrency dipped below $88,000. This drop has been attributed to a risk-off sentiment among investors, highlighted by the strength of the yen against the U.S. dollar. The BTC price has reached a three-month low, prompting bargain hunters to capitalize on the decline.
Kraken observed a surge in its perpetual futures long-short ratio, now at a record-high of 0.8. This ratio indicates a stronger inclination towards buying amidst the current price decline, as traders anticipate a potential rebound. The rise in open interests also suggests an optimistic outlook for BTC despite the decrease in price.
However, it is essential to note that the long-short ratio remains below 1, indicating that sell positions still outnumber buy positions on Kraken. This statistic suggests a lingering bearish sentiment in the market, despite the positive movement in the ratio. Theodorou indicated that while liquidations are at normal levels, there may still be excessive leverage, posing risks for potential market retracement.
In summary, although Bitcoin’s price has declined beneath $90,000, the recorded trading activity on Kraken reflects a confident approach among traders. The long-short ratio being at an unprecedented level indicates bullish sentiments, yet the market’s vulnerability to further downside remains a concern due to existing leverage.
In conclusion, the rise in Bitcoin purchases amid a price decline signifies traders’ confidence in a market rebound. The record high in the long-short ratio indicates a growing willingness to establish long positions, though caution is warranted given that the number of shorts still outnumbers longs. Potential market risks, such as excess leverage, highlight the need for ongoing vigilance among investors.
Original Source: www.coindesk.com
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