Bitcoin drops below $65,000 with over 70% probability—what is the market worried about?

The weekend sell-off caused Bitcoin's price to briefly dip below the psychological threshold of $75,000, and market sentiment seems to have changed overnight. On the prediction platform Polymarket, a compelling betting war is heating up: the odds of Bitcoin falling below $65,000 by 2026 have surged to 72%, attracting nearly one million dollars in bets. This is not just a numbers game; it’s a mirror reflecting the deep currents within the crypto market— from the euphoria after Trump’s election victory to the current widespread anxiety about “deep dips,” the speed of this shift is astonishing.
What’s more, some veteran players are alert: this decline has put the company with the largest Bitcoin holdings, MicroStrategy, to its first test since late 2023— its average cost basis has been breached. It’s like a marathon leader suddenly finding the track beneath them turning slippery.
Why has market sentiment suddenly turned sour?
On the surface, it looks like a price correction. But a closer look reveals several forces pulling in the same direction, collectively dragging the market.
First, there are technical “breakdown” signals. According to some on-chain analysis firms, Bitcoin has been in a “bear market” cycle since falling below its 365-day moving average in November 2025. This long-term moving average is often seen as the “bull-bear dividing line,” and once lost, it tends to trigger systematic de-risking among technical investors. I remember during the 2018 bear market, similar long-cycle moving average breaches led to months of prolonged decline and bottoming processes— early bottom fishing would have been like “walking into a flying knife.”
Second, the macro liquidity “tap” seems to be tightening. Some macro analysts point out that the current correction is mainly due to liquidity tightening in the overall US financial environment, rather than any fatal flaw within cryptocurrencies themselves. Changes in the Federal Reserve’s balance sheet, the draining effect of Treasury bond issuance—these seemingly distant macro factors are actually transmitted through risk asset pricing logic directly into Bitcoin’s price. When liquidity recedes, the most volatile assets are the first to show it.
Finally, an interesting perspective comes from industry insiders. Mati Greenspan, CEO of Quantum Economics, reminds us that perhaps we’ve been focusing on the wrong thing all along. He wrote on social media that Bitcoin’s core design goal is to be a currency independent of the traditional banking system; price appreciation is just a “side effect,” not its purpose. This view is like a cold splash of water, prompting us to think: when the market only cares about price movements, has it already deviated from its original vision?
Are prediction markets’ “crystal balls” accurate?
The high-probability bets on Polymarket undoubtedly amplify market pessimism. Besides the odds of falling below $65,000, bets on Bitcoin dropping to $55,000 have reached 61%. Meanwhile, there’s still a 54% chance that it will rebound to $100,000 before the end of the year. This tug-of-war between bulls and bears precisely illustrates the market’s significant disagreement.
But here’s a key question: does the “probability” in prediction markets equal the “truth” of the future? Not necessarily. It more reflects the collective sentiment of market participants voting with real money. This sentiment can be highly contagious and self-fulfilling, but it can also reverse instantly due to a sudden positive catalyst. Just like the epic bull run that followed the March 2020 crash— nobody could have predicted it at the time. Prediction markets are an excellent window into market sentiment, but they are not a navigation tool for investing.
Additionally, Polymarket itself faces some regulatory challenges, such as restrictions in Nevada due to licensing issues. This reminds us that this “sentiment barometer” is also operating in a dynamic environment.
Conflicting institutional views—who should retail investors listen to?
Faced with market confusion, the opinions of large institutions are also clashing interestingly.
On one hand, bearish sentiment is widespread in prediction markets and among some analysts. On the other hand, just a few months ago, several top institutions issued quite optimistic forecasts. For example, Grayscale Investments predicted Bitcoin could break its all-time high of $126,000 in the first half of 2026, citing ongoing institutional adoption and gradually clarifying regulations. Analysts from Standard Chartered and Bernstein also projected a target of $150,000 in 2026, though they later lowered expectations due to slowing ETF inflows.
This contradiction is not uncommon. The long-term logic of institutions (such as Bitcoin’s scarcity and the narrative of digital gold) often clashes with short-term market fluctuations (liquidity, sentiment, technical signals). For investors, the key is to distinguish which voice they are hearing— a multi-year trend judgment or a warning about risks in the coming quarters?
What should investors focus on now?
Market noise is abundant, but I believe we can concentrate on a few more substantive points rather than being led by simple price probabilities.
MicroStrategy’s “cost basis” defense: As a market “flagship,” its stock price and cost basis are worth watching. If Bitcoin remains below its average cost, will it shake its long-term holding strategy or influence other listed companies’ follow-up actions? This is an important indicator.
Real macro liquidity data: Instead of guessing, pay attention to actual data like the Federal Reserve’s balance sheet and the US Treasury General Account (TGA) balance. These are the “driving forces” behind all risk assets, including cryptocurrencies.
On-chain activity’s “quality” and “quantity”: When prices fall, are long-term holders panic-selling or calmly accumulating? On-chain data can tell us whether holdings are dispersing or consolidating. For example, changes in long-term holder supply, inflows and outflows on exchanges—these indicators are often more forward-looking than price charts.
Does your own investment logic still hold? This is the most important point. Why did you invest in Bitcoin in the first place? Because you believe in its long-term potential as a store of value, or just for short-term speculation? If your long-term reasoning remains unchanged (such as global currency issuance or sovereign credit risks), then market volatility can serve as a test of your conviction and an opportunity for better entry points. If you’re just riding the wave of hype, then any tremor can make you uneasy.
Markets always swing between excessive optimism and excessive pessimism. When 72% of Polymarket bettors are betting on a decline, perhaps it’s time for us to stay calm and think contrarily. After all, in the crypto world, consensus is often very costly, and real opportunities often arise when consensus breaks. Of course, any judgment should be based on your own situation. Markets are always uncertain, and good risk management and position sizing are essential to survive any cycle.