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How KITE’s pullback tests bullish resolve after 74% February rally

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Why KITE traders need to remain cautious.

Posted: February 28, 2026 Avatar

By: Olayiwola Dolapo Journalist Edited By: Jacob Thomas How KITE 19% pullback tests bullish resolve after February surge

Olayiwola Dolapo Journalist Edited By: Jacob Thomas Posted: February 28, 2026 Share this article

Kite [KITE] has lost the momentum it built over the weekend, recording a 19% decline, at press time, after posting a cumulative 74% gain in February alone.

The key question now is whether bulls can sustain their strength or whether the current slide marks the beginning of a deeper retracement rather than a temporary correction before another rebound.

Liquidity movements call for caution

Liquidity conditions in KITE’s perpetual contracts across centralized exchanges warrant careful attention.

As the price declines, the perpetual market shows a steady rise in short positions. The Open Interest-Weighted Funding Rate, which indicates where capital in the perpetual market is concentrated, shows that shorts currently hold the advantage.

At the time of writing, the metric has dropped to approximately 0.0082%, reflecting growing bearish positioning.

KITE Open interest weighted funding rate.

Source: CoinGlass

When capital increasingly skews toward short positions, it often adds downward price pressure. In addition, trading volume appears largely driven by short sellers.

CoinGlass’ Long/Short Ratio, which measures whether long or short volumes dominate the market, suggests that short traders currently maintain control.

The ratio has fallen to around 0.82 as of writing, highlighting the strength of sellers and the potential for price to tilt further in their favor.

Spot investors are selling

The selling pressure is not limited to derivatives. The spot market reflects a similar shift, with investors offloading holdings rather than building momentum.

CoinGlass’s spot exchange netflow data shows that roughly $200,000 worth of KITE has flowed into exchanges over the past 24 hours, indicating net selling. This follows a previous session in which spot traders accumulated approximately $1.89 million worth of KITE.

Source: CoinGlass

Such a reversal, particularly during a price downturn, often signals rising investor skepticism and the possibility of further downside. While the current sell-off remains moderate at the time of writing, continued price weakness could trigger a broader wave of selling.

That said, trader behavior remains fluid. Some participants may view the decline as a buying opportunity. If the price stabilizes or posts a modest rebound, it could indicate that certain spot investors accumulated positions during the dip.

Liquidity remains thin

An analysis of the liquidation cluster chart, which identifies potential liquidity attraction zones, suggests limited nearby clusters. This indicates relatively thin liquidity around current price levels.

In such conditions, KITE’s short-term direction will likely depend heavily on real-time momentum and active trading flows.

Source: CoinGlasscoin

A key metric to monitor is overall trading volume. At present, volume stands at approximately $198 million, up about 3.4%. If price continues to fall while volume expands sharply, it would likely confirm strong bearish conviction and increase the probability of a deeper decline.

Conversely, if price declines alongside contracting volume, it would signal cooling selling pressure and suggest that the current move may be losing strength.

Final Summary

KITE has declined after an extended period of investor accumulation.
Spot investors and derivatives traders are adding to the pressure, increasing the risk of a steeper pullback.

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Olayiwola Dolapo

Olayiwola Dolapo is a Crypto Research Analyst at AMBCrypto, driven by a mission to make the digital asset space more transparent and understandable for all. His journey was catalyzed by an early experience in the market that underscored the importance of deep, foundational knowledge—a principle that now guides his professional work. More Articles