Tom Kushner Polymarket traders see 72% odds of Bitcoin falling below $55K as the cryptocurrency’s market cap plunges to $1.31 trillion. Analysts warn of more downside before potential recovery.
Polymarket traders predict deeper fall as Bitcoin struggles to hold support
The cryptocurrency market has entered a fresh wave of uncertainty as Polymarket odds show a growing belief that Bitcoin could fall below $55K. As Bitcoin’s market cap slips to $1.31 trillion, traders are taking increasingly bearish positions, pointing to weakened liquidity, waning investor momentum, and tightening market conditions. The focus keyword Bitcoin has been under intense pressure after a prolonged period of sideways trading and now faces questions about whether the market is approaching a new cycle low.
Polymarket, the decentralized prediction platform known for capturing sentiment shifts, shows traders placing heavy bets on Bitcoin’s decline. The odds of Bitcoin trading under $55K surged to 72%, backed by over $1.2 million in trading volume. Additional bets predicting further slides below $50,000 and $45,000 are also rising, with growing volume suggesting deeper uncertainty across digital asset markets.
Bitcoin market cap plunges as traders lose confidence
The global ranking of Bitcoin’s market capitalization has fallen to 15th among all assets as the price dropped below $65,000. The move marks a steep reversal from the highs near $90,000 reached earlier this year. Bitcoin has shed nearly $440 billion in market value in 2026, accounting for about a quarter of its total capitalization. The broader crypto market mirrors this pattern, losing roughly $760 billion or nearly 25% of its total size.
Despite this sharp contraction, the long-term picture remains complex. At $65,900, Bitcoin is still up about 22% compared to five years ago, showing both resilience and volatility. This dual nature continues to puzzle traders who once viewed it as a hedge against inflation. Instead, it now behaves more like a high-beta risk asset, moving closely with macroeconomic signals such as interest rate expectations and liquidity cycles.
For now, Polymarket traders appear convinced that the correction is not yet over. The surge in bearish positioning suggests market participants see more pain ahead before a potential rebound.
Analysts identify $55K as the potential market bottom
Market research firms and analysts are increasingly aligning with the prediction that Bitcoin could revisit the $55,000 zone before any meaningful recovery. Analysts at Standard Chartered recently projected that Bitcoin could dip as low as $50,000 in the short term before a rally toward $100,000 later in the year. CryptoQuant, another key analytics platform, refers to $55,000 as the “ultimate market bottom” based on on-chain data patterns similar to the 2022 capitulation phase.
CryptoQuant also noted extreme liquidity stress within the Tether ecosystem. This signal, often seen during market inflection points, suggests a shortage of stablecoin liquidity available for fresh crypto purchases. Data shows net inflows of USDT to exchanges dropped sharply from $616 million in November 2025 to just $27 million in February 2026, reflecting a major decline in buying power. Such conditions often precede local bottoms but can also extend selloffs as traders retreat to cash positions.
Long-term believers hold steady amid short-term fear
Despite the rising odds against Bitcoin on Polymarket, not all analysts are bearish. Prominent Bitcoin advocate Pierre Rochard described the cryptocurrency as “the most undervalued asset in the world,” emphasizing its long-term scarcity and growing network strength. Similarly, institutional sentiment appears more optimistic than short-term traders might suggest.
A recent Coinbase survey revealed that 70% of institutional investors view Bitcoin as undervalued when priced between $85,000 and $95,000. These investors point to its underperformance relative to gold and equities, arguing that Bitcoin remains an early-stage asset class with long-term asymmetric potential. The survey highlights the gap between speculative market activity and institutional conviction.
However, the near-term outlook remains driven by macro conditions. Inflation expectations, liquidity flows, and regulatory signals continue to dominate sentiment. Until stablecoin inflows recover and market liquidity normalizes, the pressure on Bitcoin prices could persist.
What comes next for Bitcoin traders
Polymarket’s data reflects the collective psychology of the market — one that is currently leaning toward caution rather than optimism. With odds heavily tilted toward a fall below $55K, traders are positioning defensively. Yet history shows that moments of maximum pessimism often mark turning points for Bitcoin.
If Bitcoin does reach the $55,000 range, on-chain metrics suggest strong accumulation zones could emerge. Long-term holders continue to increase their supply, signaling quiet confidence beneath the surface. The interplay between speculative sentiment and long-term conviction could ultimately define the next major market move.
For now, all eyes remain on Polymarket’s rapidly shifting odds and whether Bitcoin’s next move confirms or defies the crowd.
Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards.
