Bitcoin holds below $80,000.
Open interest in $75,000 put options surged, with Deribit data showing the $75,000 puts swelling and nearly matching the $100,000 call strike within days, while Polymarket contracts tied to higher bitcoin targets softened through late January.
The market also saw the liquidation of hundreds of millions of long bets, including more than $500 million in leveraged long positions forcibly closed within 24 hours, with selling concentrated on perpetual futures venues amid thin liquidity over a weekend.
The market liquidation event occurred when more than $500 million in leveraged long positions were forcibly closed within a span of 24 hours. This significant liquidation took place during a weekend, a period characterized by thin liquidity as traditional finance traders were not active, contributing to intensified market volatility. The selling pressure was particularly concentrated on perpetual futures venues. This was primarily due to margin dynamics, where traders needed to meet margin requirements, forcing them to sell positions in a less liquid market environment. As a result, the cascade of margin calls and liquidations further propelled market movements, exacerbating the decline in Bitcoin’s price.
In January, prediction markets related to Bitcoin showed distinct trends. Polymarket contracts linked to higher Bitcoin price targets experienced a gradual softening throughout the month. Meanwhile, Deribit data revealed a surge in open interest for $75,000 put options, with levels nearly matching those of the $100,000 call strike within a short period.
In prediction markets, the payoff is determined by the final price level rather than the speed or volatility of movements along the path. Galaxy Digital’s research indicated that directional prediction markets tend to compress complex beliefs into simple binary outcomes, reflecting the market’s attempt to distill expectations about future Bitcoin price fluctuations into definitive wagers.
Bitcoin holds below $80,000, with markets seeing significant liquidation and shifts in prediction markets. More than $500 million in leveraged long positions were forcibly closed within 24 hours, and hundreds of millions in other long bets were liquidated during the period. Polymarket contracts tied to higher bitcoin targets softened through late January while Deribit data showed open interest swelling in $75,000 put options.
