BTC stays below $80,000 while January forecast contracts dodge liquidation-driven drop: Asia Morning Highlights

Bitcoin Volatility Highlights Gap Between Prediction and Derivatives Markets

As bitcoin’s price swung sharply, options markets flashed rising tail risk—but January prediction contracts adjusted only slowly, revealing how differently these markets interpret risk.

Welcome to Asia Morning Briefing, your daily roundup of market moves and top stories during U.S. hours. For a deeper look at U.S. markets, see CoinDesk’s Crypto Daybook Americas.

Bitcoin’s latest slide exposed a familiar pattern: probability gauges drifted lower while derivatives traders scrambled for protection. Open interest in $75,000 put options surged, and hundreds of millions of dollars in long positions were liquidated—but prediction markets showed only a gradual decline in upside conviction.

Throughout January, Polymarket contracts on higher bitcoin targets softened slowly, never reflecting the abrupt volatility that erased leveraged long positions in a single day.

The reason is structural. Prediction markets focus on end states: contracts pay out if bitcoin finishes above a target at month’s end, regardless of short-term turbulence. Sharp, temporary drops matter less if traders believe a rebound is possible before expiry. Galaxy Digital notes that these markets compress complex beliefs into binary outcomes, often overstating consensus while masking tail risk.

Derivatives markets operate differently. Deribit data showed $75,000 put open interest swelling nearly to the $100,000 call strike. Traders were buying protection as volatility expectations spiked and downside risk widened.

The liquidation data made the divergence clear. Over $500 million in leveraged long positions were forcibly closed in just 24 hours, concentrated on perpetual futures where margin dynamics amplify moves. For leveraged funds, such events are urgent. For month-end prediction contracts, they only matter if they shift beliefs about the final price.

As QCP’s 2025 year-end review noted, crypto operates at two speeds: structural optimism coexists with sudden, leverage-driven drawdowns. Bitcoin didn’t fall below $75,000—but it also didn’t reach the levels that prediction markets suggested. The final outcome highlighted how differently these markets measure the same underlying risk.

Market Movements

• BTC: Just under $80,000 after a week of volatility and leveraged long liquidations, pushing traders toward protection rather than fresh upside bets.
• ETH: Near $2,300, continuing its multi-week slide as risk appetite stayed muted.
• Gold: Around $4,750 per ounce, down sharply from a $5,300 test earlier in the week.
• Nikkei 225: Inched higher Monday amid mixed Asia-Pacific trading. China’s January factory activity expanded at its fastest pace since October, while South Korean and Hong Kong equities fell, and gold continued to decline.

Elsewhere in Crypto

• Crypto exchanges sanctioned alongside Iranian officials in Trump administration’s Iran crackdown (The Block)
• Ethereum security upgrade: Foundation prioritizes post-quantum security with leanVM and PQ signatures (CoinDesk)

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