Bitcoin traders are staring down another wave of pain after a violent liquidation cascade erased $704 million from the market in just one day. The sudden flush has rattled even seasoned crypto veterans—and sent investors scrambling to prediction markets for hints about where Bitcoin’s fall might finally stop.
Right now, the crowd isn’t optimistic.
Prediction Markets Flash Red
On Polymarket, where traders put real money behind their forecasts, sentiment has shifted sharply toward the downside.
The platform’s heavily traded “What price will Bitcoin hit in February?” market—already boasting more than $14 million in volume—now assigns a 56% probability that Bitcoin will sink to $70,000 or lower before the month ends.
Just weeks ago, many were betting on a swift rebound. Today, the odds of Bitcoin reclaiming $85,000 in February have slipped to 41%, signaling fading confidence in a near-term recovery.
Looking further ahead, the picture remains uneasy.
In Polymarket’s 2026 price outlook, traders see a 74% chance that Bitcoin touches $65,000 at some point this year, underscoring how deeply downside risk has seeped into expectations. While optimism hasn’t vanished entirely—59% still believe Bitcoin will eventually reclaim $100,000 before 2027—dreams of a moonshot are fading fast. The probability of Bitcoin hitting $150,000 this year has collapsed to just 14%.
Why Bitcoin Is Sliding Now
The sell-off isn’t happening in a vacuum.
Rising geopolitical uncertainty has pushed investors toward traditional safe havens, reigniting the debate over Bitcoin’s role as “digital gold.” Economist Mohamed El-Erian recently pointed out that gold has outperformed Bitcoin over the past five years—and may be poised to do so again heading into 2026.
At the same time, fears around monetary policy are weighing heavily on risk assets. Market commentators have linked Bitcoin’s weakness to concerns that a prospective new Federal Reserve chair could shrink the Fed’s footprint, draining liquidity that has historically fueled crypto rallies.
Politics are also muddying the waters. Senator Elizabeth Warren labeled recent reports of a $500 million UAE investment in a Trump-affiliated crypto firm as “corruption,” igniting fresh debate over crypto’s regulatory future and its relationship with power and politics.
Adding to the bearish chorus, Michael Burry, famed for predicting the 2008 housing crash, poured cold water on Bitcoin’s narrative altogether—arguing it has “no organic use case” strong enough to halt its decline.
The result? A perfect storm of macro pressure, political controversy, vocal skeptics, and overleveraged positions—all colliding to trigger cascading margin calls.
Shockwaves Beyond Crypto
Bitcoin’s slump isn’t staying confined to the crypto charts.
Crypto-exposed stocks like Coinbase Global and MicroStrategy have fallen in lockstep with BTC. MicroStrategy, which holds more than 700,000 Bitcoin on its balance sheet, is once again under the microscope as investors question how much more volatility it can absorb if prices keep sliding.
Meanwhile, some investors are quietly rotating elsewhere. AI and big-tech names such as Palantir and Nvidia could benefit if capital continues flowing out of speculative crypto trades and back into companies with clearer revenue narratives.
A Critical 48 Hours Ahead
For Bitcoin, the next two days may be decisive.
If buyers step in and defend current levels, confidence could stabilize—at least temporarily. But if support cracks, prediction markets suggest traders are already mentally prepared for another leg down.
After $704 million in liquidations and confidence shaken across the board, one thing is clear: February is shaping up to be a make-or-break moment for Bitcoin’s 2026 story.