Polymarket bettors have placed a 60% probability on the price of bitcoin dipping below $100,000 before 2026.
A chill in the market has taken bitcoin down a notch. Has the “crypto summer” come to an end?
The price of bitcoin, the world’s largest and best-known cryptocurrency (BTCUSD), fell below $110,000 Thursday evening, down more than 5% for the week and more than 10% off its August all-time high over $124,000. Altcoins like ether (ETHUSD) and solana (SOLUSD) also slid, dragging the estimated total value of the crypto market under $4 trillion.
Crypto stocks have been hit, too. Bitcoin treasury stock Strategy (MSTR) and stablecoin issuer Circle (CRCL) has fallen about 10% in the past week, while crypto exchange Coinbase Global (COIN) dropped around 7%.
The latest sell-off started Sep. 21, when over $1.5 billion in leveraged-long positions in bitcoin were liquidated, a move that dragged on other coins. The phenomenon refers to when trading positions of people who borrowed heavily to bet that bitcoin would rise are closed after price action exceeds a trader’s margin requirement.
Some market watchers expect more pain. Polymarket bettors have recently placed a 60% probability on the price of bitcoin dipping below $100,000-level before year’s end.
Another bearish sentiment indicator is options skew, which measures how much more expensive bullish call options on bitcoin are than bearish puts. That skew across maturities showed prices at their richest since the tariff selloff earlier this year, which indicates defensive positioning, according to Sean Farrell, Fundstrat’s head of digital asset strategy.
A factor that distinguishes this cycle from some past ones is the growth of spot bitcoin ETFs like BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity Wise Origin Bitcoin Fund (FBTC). Collectively, these funds have garnered more than $150 billion in assets under management since their launch in January 2024, representing more than 6% of current bitcoin supply.
According to Farrell, median bitcoin returns per day are stronger at the beginning of a month, and weaker in the back half, which he attributes to fund inflows, window dressing, and profit-taking.
“In the immediate term, it’s tough to feel extraordinarily optimistic,” he said.”I do think we’re going to find our footing soon and it’ll set us up for a very positive Q4.”
If bitcoin’s price history is a guide for what’s to come, crypto enthusiasts have reason to be hopeful in the near term. Some note that the roughly 1,064-day post-halving window is approaching, a time period that in the past has seen the price of bitcoin reach record highs. That happened following the last two halvings in 2016 and 2020.
Based on the bear market low, considered to be Nov. 21, 2022, bitcoin is due to peak sometime in October. At that point, though, more volatiliy could arise: At the end phases of prior cycles the price of bitcoin has crashed roughly 70% to 80% from peak to trough following all-time highs.
