Recent data from Polymarket, a popular prediction market platform, revealed that 45% of traders believe Bitcoin’s price will fall below $45,000 before September.
This bearish sentiment peaked at a 65% probability during early European trading hours on Monday amidst a broader market meltdown.
The Shift in Sentiment from Polymarket Bettors Amid Bitcoin Dip
The dramatic shift in market sentiment is particularly noteworthy given that just a few days ago, Polymarket bettors assigned only a 5% chance of Bitcoin dropping below $45,000 before September.
Even as late as yesterday, when market turbulence had already begun, the odds remained between 5% and 15%.
Bitcoin’s price took a severe hit, falling below $55,000 on August 5, and continued its descent to around $50,000 before rebounding to $55,289 at press time.
This sharp decline has triggered over $1 billion in liquidations within the past 24 hours, underscoring the magnitude of the market’s volatility.
The bearish outlook wasn’t limited to Bitcoin, as Ethereum, the second-largest cryptocurrency by market capitalization, also faced a grim forecast on Polymarket.
Traders gave Ethereum just a 3% chance of being priced above $3,000 on August 9, a stark contrast to the 75% probability assigned when the betting pool was created on August 2.
Ethereum’s price has mirrored Bitcoin’s decline, falling 22% in a day and 33% over the week, settling around $2,511 at press time.
The crypto market’s turbulence has also seen Polymarket create a dedicated “Market Crash” tab alongside its U.S. election tab, indicating growing sentiment on a further dip.
Similarly, bettors on the platform have increased the odds of an emergency interest rate cut by the Federal Reserve to 50%, up from 23% just a day earlier, which showed a decision paralysis from bettors on the platform.
Recall that Bitcoin price dropped below $63,000 as US job data raised recession fears on August 2, with CME’s Watch Tool suggesting a greater than 70% likelihood of the Fed implementing a 50bps interest rate cut in September.
Analysts’ Views and Market Predictions on the Likelihood of Bitcoin Trading Below $45k
Amid several macroeconomic factors and global unrest, there is a divergent view on the market’s future direction.
Tuur Demeester, a long-time Bitcoin analyst and advisor at Blockstream, suggests that Bitcoin’s downtrend could extend to the $40,000 – $45,000 range.
Looking for a solid technical BTC/USD target on the downside, I’d say the $40-45k zone looks suitable. To me that’s just psychological prep though—in a bitcoin bull market you don’t take bearish bets because prices can whipsaw back up in no time. pic.twitter.com/Au8GyaNNTI
— Tuur Demeester (@TuurDemeester) August 5, 2024
However, he cautions against taking bearish bets in a Bitcoin bull market, noting that prices can rapidly reverse course.
Other analysts, such as the pseudonymous crypto analyst “the Moon,” argue that Bitcoin needs to reclaim the $51,000 mark to avoid further downside, with $45,000 being a potential target if support levels fail to hold.
#BTC must get back above the support, otherwise we might dump to $45,000 pic.twitter.com/0fkKeEV3m9
— The Moon (@TheMoonCarl) August 5, 2024
The current market downturn is not unprecedented. According to @TheKingCourt, co-founder at Real Vision, Bitcoin’s over 20% decline aligns with previous bull cycle retracements.
He draws parallels with 2021, when a 55% correction preceded a strong rally to all-time highs, suggesting that a bottom around $45,000 could be reasonable in the current cycle.
Notably, the current $50,000 level represents significant psychological and technical support for Bitcoin.
Data from Coinglass indicates that over $400 million worth of cumulative leveraged short positions would face liquidation if Bitcoin were to fall below this threshold.
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