Savvy investors appear to be swooping in while others panic, potentially signaling a coming rebound that could catch the market off guard

As Bitcoin tumbles below the $88,000 mark to a three-month low, a fascinating countertrend is emerging on Kraken, one of the cryptocurrency world’s major exchanges. While fear dominates market sentiment, data reveals that experienced traders may be strategically positioning themselves for what they anticipate could be a significant bounce.

According to Alexia Theodorou, Kraken’s head of derivatives, the exchange has witnessed a remarkable surge in traders opening long positions on Bitcoin perpetual markets despite the price slide. This activity has pushed the long-short ratio to an unprecedented 0.8 – the highest ever recorded on the platform.

“Despite bitcoin’s price dropping below $90K, Kraken has seen a surge in traders opening long positions on its BTC perpetual markets,” Theodorou explained in an interview. “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.'”

This contrarian move comes as broader markets signal risk aversion. Nasdaq futures indicate continued caution on Wall Street, while the Japanese yen – traditionally a safe haven during market turbulence – maintains strength against both the U.S. dollar and growth-sensitive currencies like the Australian dollar.

Bitcoin’s recent decline followed a significant $1 billion increase in open futures positions on Binance late Monday, likely representing traders establishing short positions in anticipation of further price drops.

While the growing appetite for Bitcoin at lower prices on Kraken offers an encouraging sign for bulls, Theodorou cautions that the long-short ratio still remains below 1, indicating shorts continue to outnumber longs on the exchange.

“While this [record long-short ratio] speaks to the underlying positive sentiment in the market, liquidations are still at relatively normal levels, meaning that there may still be excess leverage in the system,” Theodorou warned. “This could potentially leave the market vulnerable to further downside moves, possibly in the shape of a long squeeze, in the near-term.”

As Bitcoin tests key technical support levels, market participants are closely watching whether these “dip buyers” will be vindicated or if further capitulation lies ahead.