Prediction Markets Bet Against Big Bitcoin Rally
Prediction markets are signaling skepticism about Bitcoin's short-term prospects, giving it only a 10% chance of reaching $150,000 by the end of the year. The odds, which slipped recently, are increasingly used by investors as a gauge of broad market sentiment.
The cautious sentiment extends beyond year-end bets, with Polymarket traders assigning a 77% probability that Bitcoin will remain below $75,000 throughout 2026. Another active market shows a 55% chance of Bitcoin hitting $60,000 before it reaches $80,000, signaling short-term bearishness. This data reflects a broader deleveraging, as open interest in derivatives has dropped while trading volume surged, a pattern often associated with forced liquidations. This contrasts with a November 2025 survey where only 17.7% of institutional investors believed Bitcoin had already peaked for the cycle. By February 2026, that number jumped to 55.7%, indicating a significant shift in institutional sentiment from expecting a final rally to believing the cycle top is already in. Despite the short-term pessimism, institutional players are not pulling back entirely. A recent survey showed 55.8% intend to increase their exposure to crypto in 2026, suggesting a strategy of accumulating during a consolidation phase rather than a full retreat. This aligns with on-chain data showing consistent buying activity across most wallet sizes, especially those holding 10 to 100 BTC. Still, the flow of institutional money has slowed. U.S.-based spot Bitcoin ETFs have seen a net outflow of $2.6 billion so far in 2026, a stark reversal from the $4.3 billion in net buying during the same period in 2025. This nearly $7 billion gap highlights the current "risk-off" sentiment among larger investors. This cautious stance is also reflected in analyst price targets, which vary widely. Projections for 2026 range from a bearish $60,000-$75,000 to a more optimistic $150,000-$170,000 from firms like Bernstein and J.P. Morgan. This divergence underscores the uncertainty stemming from macroeconomic factors like liquidity and monetary policy shifts. Prediction markets have gained credibility for their accuracy in forecasting, often outperforming traditional polls and pundits because they require participants to have "skin in the game." Platforms like Polymarket, which facilitate these bets, function as real-time probability indicators that aggregate the collective wisdom and conviction of thousands of traders.
