Polymarket’s Bearish Bet: As Bitcoin Slides, Prediction Markets Flash Red for 2026 Bulls

When the crowd starts betting against you, it’s time to check your wallet. That’s the mood in crypto after a bruising weekend, with Bitcoin sliding below $80,000 and Polymarket bettors suddenly assigning a 71% chance that the world’s largest digital asset will drop below $65,000 in 2026. If you’re a Bitcoin bull, that’s not just a red flag, it’s a full-on fire alarm. The market has seen its share of pain lately, but the speed at which sentiment has flipped is enough to make even the most diamond-handed trader sweat.

Let’s set the stage. Just days ago, the narrative was all about institutional adoption and ETF inflows. Now, the conversation is about liquidation cascades and whether Michael Saylor’s legendary Bitcoin gamble is about to blow up on national television. The catalyst? Kevin Warsh’s confirmation as the next Fed chair, which triggered a $2.5 billion wipeout across crypto markets and sent Bitcoin tumbling through key support. As of this morning, Bitcoin is trading around $75,000, licking its wounds and trying to convince anyone who’ll listen that this is just a healthy correction.

The data doesn’t lie. According to cryptonews.com, Polymarket participants now see a 71% probability that Bitcoin will fall below $65,000 this year. That’s a staggering reversal from just a month ago, when the same crowd was pricing in a melt-up to $100,000. The shift is not just about price, it’s about psychology. The market has gone from euphoria to existential dread in record time. Jim Cramer, never one to miss a headline, is now openly questioning where the Bitcoin bulls have gone as the price slides to $74,000. Meanwhile, the liquidation tally keeps mounting, with over $2.5 billion in positions wiped out in a matter of hours.

Context matters. The last time prediction markets were this bearish was in mid-2022, right before the FTX implosion. Back then, the crowd was right. But this time, the macro backdrop is different. The Fed is hawkish, yes, but inflation is sticky and real rates are still negative. The ETF narrative hasn’t died, but it’s been overshadowed by liquidation risk and regulatory uncertainty. Cross-asset flows are telling a story of risk-off. Gold and silver just got crushed, equities are flatlining, and crypto is the only asset class showing real volatility. That’s not a coincidence. When risk appetite dries up, the most speculative assets get hit first.

The real story here is that prediction markets are now the canary in the coal mine for crypto sentiment. When Polymarket bettors are this bearish, it’s usually a sign that the pain trade is not over. But it’s also a potential contrarian signal. The market loves to punish consensus, and right now, the consensus is that Bitcoin is headed for the basement. The question is whether this is the start of a deeper unwind or just another shakeout before the next leg higher.

Strykr Watch

Technically, Bitcoin is hanging on by its fingernails. The key level to watch is $72,000. A break below that opens the door to $65,000, which is where the Polymarket crowd has planted its flag. Resistance is now at $78,000, with a clean break above that needed to restore any bullish momentum. The 200-day moving average is lurking at $69,500, and if we get there, expect fireworks. RSI is oversold at 32, but that’s cold comfort in a market that’s been steamrolled by liquidations.

The liquidation data is ugly. Over $2.5 billion in positions wiped out, with leverage getting flushed at every level. Open interest has cratered, and funding rates have flipped negative. That’s usually a sign that the worst is over, but with sentiment this bearish, it’s hard to call a bottom. Watch for a reversal in funding rates and a pick-up in spot buying before getting too cute on the long side.

The risk is that the pain trade accelerates. If Bitcoin breaks $72,000, the next stop is $65,000. If Polymarket bettors are right, we could see a capitulation wick that takes us there in a hurry. On the flip side, if the market can reclaim $78,000, the shorts will be forced to cover, setting up a face-ripping rally. This is not a market for tourists.

The risks are straightforward. If the Fed doubles down on hawkish rhetoric, crypto will remain under pressure. If liquidations continue, we could see a cascade that takes Bitcoin well below $65,000. If ETF flows dry up, the narrative shifts from adoption to abandonment. And if Michael Saylor’s MSTR position gets margin called, all bets are off.

But there are opportunities. If you have the stomach for volatility, buying the capitulation wick at $65,000 with a tight stop could pay off. If funding rates flip positive and spot buying returns, a move back to $82,000 is in play. Shorting failed rallies at $78,000 with a stop at $80,000 is another way to play it. Just don’t get greedy, this is a market that punishes overconfidence.

Strykr Take

Prediction markets are rarely this lopsided, and when they are, it usually means the crowd is about to get run over. Bitcoin is down but not out. If you’re a trader, this is the time to sharpen your edge. Don’t chase, don’t panic, and don’t ignore the signals. The next move will be violent, and the only question is whether you’re on the right side of it.