Bitcoin (CRYPTO: BTC) traders are bracing for more pain after liquidations reached $704 million in a single 24-hour period. The sharp sell-off has crypto investors turning to prediction markets for clues on where the bottom might be.
What Polymarket Traders Are Predicting
Polymarket is currently flashing warning signs for the immediate future.
The “What price will Bitcoin hit in February?” market, which has already cleared $14 million in volume, now places a 56% probability on Bitcoin sliding to $70,000 or below before the month is out.
Conversely, the odds of a recovery to the $85,000 level this month have dropped to 41%.
The outlook for the remainder of the year suggests a recovery, but with significant downside risk.
According to the “What price will Bitcoin hit in 2026?” market, traders see a 74% chance that Bitcoin will touch $65,000 at some point this year.
While the majority of bettors (59%) still believe Bitcoin will eventually recapture the $100,000 milestone before 2027, the conviction for a massive breakout is waning; the odds of hitting $150,000 this year have dwindled to just 14%.
Why Is Bitcoin Crashing Now?
Geopolitical uncertainty has sparked a flight to traditional safe havens, with economist Mohamed El-Erian noting that gold has outperformed Bitcoin over the past five years and may be doing it again in 2026.
Commentators have linked the fall to fears that the prospective new Fed Chair plans a smaller Fed footprint and reduced liquidity.
Political winds may be adding to crypto’s woes. Senator Elizabeth Warren (D-Mass.) called it “corruption” after reports emerged of a $500 million UAE investment in a Trump-affiliated crypto firm.
The controversy could be feeding into broader disillusionment with crypto’s regulatory outlook and institutional adoption narrative.
Adding fuel to the bearish fire, Michael Burry of “The Big Short” fame argued that Bitcoin has “no organic use case” to stop its descent.
The combination of macro headwinds, prominent skeptics, and overleveraged positions created a perfect storm for cascading margin calls.
Why This Matters For Your Portfolio
Meanwhile, AI stocks like Palantir Technologies Inc and Nvidia Corp could benefit if investors rotate out of speculative crypto plays and back into tech.
The next 48 hours could determine whether Bitcoin finds support or if another leg down is coming.
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