Bitcoin prediction markets now price a steep 2026 pullback as the base case
Traders on Polymarket are increasingly betting that Bitcoin’s next major move will be down, not up. After a sharp weekend sell-off briefly dragged BTC under 75,000 dollars on Monday, contracts on the platform began assigning a 72% probability that Bitcoin will trade below 65,000 dollars at some point in 2026. Nearly 1 million dollars has already flowed into this specific market, underscoring how seriously participants are taking the downside scenario.
The bearish positioning is not limited to the 65,000‑dollar line. Other sizable contracts on Polymarket show elevated odds that Bitcoin could sink below 55,000 dollars, with implied probabilities around 61%. At the same time, traders are still giving BTC a 54% chance of reclaiming the psychologically important 100,000‑dollar level before the end of the year. In other words, the market is bracing for extreme volatility in both directions, but is increasingly convinced that a deep dip is more likely than a smooth grind higher.
This sudden tilt toward pessimism marks a sharp reversal in sentiment. The latest sell-off has effectively wiped out the upside that followed Donald Trump’s victory in the November 2024 US presidential election, a rally many had hoped would mark the beginning of a sustained bull phase backed by friendlier political rhetoric and institutional interest.
The pullback also carries symbolic weight for one of Bitcoin’s most high-profile corporate backers. The price slide pushed BTC below the average purchase cost of Michael Saylor’s company, the largest publicly listed holder of Bitcoin, for the first time since late 2023. For many market watchers, that line had served as a rough psychological floor; dropping through it has reinforced the notion that the current downtrend is more than a temporary wobble.
Why prediction markets are suddenly so bearish
Prediction platforms like Polymarket aggregate real-money bets into probability estimates about future events. Unlike traditional forecasts from banks or research firms, these odds are continuously updated as traders react to new information and shifting macro conditions. When the probability of BTC falling under 65,000 dollars in 2026 jumps to more than 70%, it is a signal that a wide range of participants now see a serious risk that the current weakness will extend well beyond a short-term correction.
The shift comes against a backdrop of persistent macro uncertainty. Tightening dollar liquidity in the United States, slowing inflows into Bitcoin exchange-traded funds, and a cooling narrative around “digital gold” in the face of sticky inflation are all feeding into a more cautious stance. Even traders still targeting six-figure prices are increasingly acknowledging that the road there may involve a deep retracement first.
Analysts: a bear market has been in place since late 2025
On-chain analytics firm CryptoQuant has repeatedly argued that the current phase should be viewed as a bear market rather than a routine mid-cycle correction. According to the firm, the downturn effectively began in November 2025, when Bitcoin broke decisively below its 365‑day moving average — a level many longer-term investors treat as a dividing line between bull and bear regimes.
Julio Moreno, head of research at CryptoQuant, has warned traders against aggressively trying to “catch the bottom” during each new leg lower. In a recent post on X, he emphasized that market troughs in bear phases typically take months to form and are rarely defined by a single dramatic capitulation candle. The message: patience and risk management matter more now than bold dip-buying.
Bitcoin’s purpose vs. its price
Some industry veterans argue that focusing solely on the BTC price misses the bigger picture. Mati Greenspan, CEO of Quantum Economics, reiterated that Bitcoin was never designed primarily as a speculative asset whose main function is to appreciate in fiat terms. In his view, any long-term price rise is a side effect of its core design: providing a monetary system that operates outside of the control of governments and banks.
That philosophical stance does not negate short-term volatility, but it helps explain why a portion of Bitcoin holders remain unfazed by steep drawdowns. For them, prediction market odds and ETF flows are secondary to the protocol’s resilience, decentralization, and censorship resistance. Still, for traders and newer investors, price remains the key reference point — and right now, that reference is tilting bearish.
Raoul Pal: blame dollar liquidity, not “crypto-specific” failures
Macro strategist Raoul Pal offers a different lens on the current weakness. Rather than seeing the sell-off as a sign that the crypto thesis is breaking, he points to broader US liquidity conditions as the main driver. When the dollar tightens — whether through higher real rates, reduced bank reserves, or slower balance-sheet growth — speculative assets across the board tend to suffer, from tech stocks to digital assets.
This framing is crucial: if the dominant force is macro liquidity, then Bitcoin’s latest drawdown is part of a larger risk-off environment rather than a verdict on its long-term viability. For investors, that suggests watching central bank policy, Treasury issuance, and funding markets may be just as important as on-chain metrics or ETF inflow data.
Bullish Wall Street forecasts collide with bearish betting odds
The pessimistic tone from prediction markets stands in stark contrast to many institutional forecasts published over the past year. Late last year, a major digital asset manager argued that Bitcoin could not only retest, but exceed its previous record, projecting a move to roughly 126,000 dollars by June 2026. The thesis leaned heavily on growing institutional adoption, the impact of spot ETFs, and expectations of clearer regulatory frameworks in the United States.
Large banks and research houses also joined the optimistic camp. Standard Chartered and brokerage firm Bernstein both projected that Bitcoin could hit around 150,000 dollars in 2026. Yet, even these firms have already trimmed earlier, more aggressive targets, citing slower-than-expected ETF inflows and a more cautious macro outlook.
The emerging picture is a wide gap between top-down forecasts and bottom-up betting markets. While Wall Street models still lean bullish over a multi-year horizon, traders putting capital to work in prediction markets are increasingly preparing for a deeper and more prolonged washout before any eventual new highs.
What a drop below $65K would mean for investors
If Bitcoin does slide below 65,000 dollars in 2026, the impact will vary dramatically depending on an investor’s time horizon and strategy:
– Long-term holders who accumulated well below current prices may see it as another cyclical drawdown, similar to previous 70–80% corrections in past cycles, and focus on whether the network and adoption metrics remain intact.
– Late entrants from the 80,000–100,000‑dollar range could face heavy unrealized losses, increasing the risk of forced selling if they are leveraged or overexposed.
– Institutional allocators who only recently gained exposure via ETFs may slow new purchases or shift to dollar-cost averaging, stretching their entry timeline rather than exiting entirely.
– Derivatives traders may find increased volatility attractive, but the risk of liquidation spikes if downside moves are both deep and sudden.
For all of these groups, the key questions become position sizing, time horizon, and whether Bitcoin is being treated as a macro hedge, a growth asset, or a high-beta trading vehicle.
How traders are adapting: hedging and time diversification
The rise in bearish odds on Polymarket suggests more participants are actively hedging. Common approaches include:
– Options strategies such as buying puts or constructing put spreads to cap downside while leaving room for upside.
– Stablecoin rotation, where a portion of the portfolio is parked in dollar-pegged assets during high-volatility periods.
– Time diversification, spreading new BTC purchases over many months rather than committing capital in one lump sum.
These tactics reflect an environment where conviction in Bitcoin’s long-term story coexists with skepticism about the near-term path. The message from prediction markets is not that Bitcoin cannot recover or reach new highs, but that the journey is unlikely to be smooth.
Regulatory clouds over Polymarket itself
The irony of the current situation is that even as traders flock to Polymarket to express views on Bitcoin’s future, the platform is facing its own challenges. Authorities in Nevada have moved to block certain event contracts on the grounds that they constitute unlicensed wagering. Other US states, including Tennessee, have also launched enforcement actions targeting aspects of the platform’s operations.
These legal pressures raise questions about the future accessibility of such prediction markets for US participants. If regulatory scrutiny intensifies, liquidity on these venues could fragment or migrate offshore, potentially making their odds less representative of global sentiment. For now, however, the existing markets still offer a rare, real-time snapshot of how a segment of capital allocators is pricing Bitcoin’s risk profile.
How to read these odds without overreacting
For investors trying to interpret a “72% chance of BTC below 65K,” context is essential:
– Prediction market probabilities are dynamic, not guarantees; they change with every new piece of information.
– They reflect the views of those willing to stake money, which can make them more grounded than casual opinions, but also skewed toward specific demographics or geographies.
– They are best used as one input among many — alongside on-chain data, macro indicators, and traditional research — rather than as a single decisive signal.
The takeaway is not to abandon long-term theses at the first sign of bearish odds, but to acknowledge that the consensus among many active traders now includes a substantial chance of a deep retracement.
The bottom line: a high-volatility, high-uncertainty phase
Bitcoin has entered a period where macro pressures, regulatory developments, and shifting investor psychology are all pulling in different directions. Prediction markets are flashing a clear warning: the probability of another significant leg lower into 2026 is no longer a tail risk but a central scenario for many participants.
For anyone exposed to BTC — whether as a long-term believer, an institutional allocator, or a short-term trader — that reality argues for tighter risk controls, clearer time horizons, and more nuanced expectations. The long-run narrative of Bitcoin as a non-sovereign monetary asset may remain intact, but the path between today’s prices and any future all-time highs now looks bumpier than many previously assumed.