Hatinggabi na Risk-Off Trading: Bitcoin and Altcoins Amid Geopolitical Uncertainty

At midnight last Friday, the crypto markets underwent significant changes due to rising geopolitical tensions. Bitcoin dropped to $87.99K (-2.40%), while Ethereum suffered a larger decline of -3.21%, reflecting a broader risk-off sentiment in financial markets. This sentiment is directly related to the lack of hope for a resolution to the Ukraine-Russia conflict following trilateral talks.

How Market Changes Reach Midnight: Traditional Assets and Cryptocurrency

During UTC midnight, market dynamics showed interest in defensive positioning. Gold and silver reached new record highs, a classic signal that investors are moving into safer havens. Nasdaq 100 futures and S&P 500 futures declined by 0.4% and 0.25%, respectively, indicating coordination in the decline of global equities and digital assets.

The price action at midnight is not accidental — it reflects traders’ real-time reactions to overnight risk assessment. BTC rose to $88,950 during the trading session before falling due to risk-averse market conditions.

Derivative Market at Night: Liquidations and Volatility Compression

The midnight trading period saw over $200 million in liquidations in crypto futures markets within 24 hours, mostly bullish positions collapsing. This phenomenon has persisted since the start of the week due to unexpected price movements occurring at various times of the day.

The Bitcoin volatility index (BVIV) dropped again to 40% at midnight, reversing from a spike of 44% last Tuesday. This compression indicates traders actively selling volatility strategies like covered calls, suggesting market expectations have normalized.

Ethereum stood out as the only top 10 token with net inflows in futures open interest during midnight, while BTC, XRP, and SOL experienced capital outflows. On Deribit, ETH put options are more expensive than BTC equivalents, a bearish signal from derivative traders.

Altcoin Movements During Overnight Hours: ZRO, TRX, DASH Performance

The altcoin sector showed mixed performance during midnight trading. LayerZero (ZRO) adjusted -5.37% over 24 hours, not the +12% expected due to anticipation of the February upgrade. TRON (TRX) was more stable at +0.64%, while DASH declined by -2.27%.

The “altcoin season” indicator rose to 29/100, indicating slight trader interest in rotating into alternative tokens. The CoinDesk 20 Index fell by 0.6%, while memecoins, DeFi, and metaverse measures remained in negative territory during the midnight market conditions.

Market Liquidity Challenges: Night Edition

One critical observation from midnight trading is the persistent liquidity constraints in altcoin markets. An asset like TON at $1.47 has simple 2% market depth between $580,000 and $700,000 order sizes — meaning large orders are needed to move the market by 2%.

This lack of liquidity worsens at night when institutional trader participation diminishes. If the broader market rallies the next day, altcoin gains could grow due to limited sell-side liquidity seen in order books.

NFT and Metaverse Performance: Pudgy Penguins Case Study

Metaverse tokens lead in annual performance, with the CoinDesk Metaverse Select Index (MTVS) growing 50% since January 1. Axie Infinity (AXS) has declined by -57.60% year-to-date, while The Sandbox (SAND) remains at $0.12, showing volatility in the segment.

Pudgy Penguins emerged as one of the strongest NFT-native brands of the cycle, evolving from speculative digital luxury goods to a multi-vertical consumer IP platform. The ecosystem has reached over $13M in phygital sales and 1M+ units sold, with Pudgy Party surpassing 500K downloads. The token (PENGU) was airdropped to over 6M wallets, but the premium valuation needs to be supported by execution in retail expansion and gaming adoption.

Chain Data and Market Structure: Overnight Positioning

Approximately 63% of Bitcoin supply with a cost basis above $88,000 indicates concentrated positioning. On-chain analysis shows significant supply concentration between $85,000 and $90,000, with thin support below the $80,000 level.

The midnight market structure reflects global participation patterns — while U.S. markets are closed, Asian and European sessions continue trading, resulting in unique price action not seen during regular trading hours. This phenomenon is critical to understanding how crypto markets are truly 24/7 and how risk-off sentiments can trigger at any time of day or night.