Bitcoin News Today: Bitcoin Bearishness Grows as Polymarket Prices in 32% Drop Risk

Polymarket Predicts 32% Chance of Bitcoin Dropping Below $80,000 in December

Polymarket users are signaling growing bearish sentiment around Bitcoin, with a 32% probability assigned to the cryptocurrency dropping below $80,000 in December 2025. This prediction highlights a shift from earlier optimism in 2025, as traders now expect a more cautious market environment according to market analysis.

The bearish outlook is reinforced by recent price action, with Bitcoin currently trading around $90,000 and struggling to break above key resistance levels. Weak flows into Bitcoin ETFs and broader macroeconomic uncertainty have contributed to this downward pressure.

Meanwhile, the rise of artificial intelligence (AI) as a dominant theme in financial markets has further diverted attention and capital away from Bitcoin. Investors are increasingly prioritizing AI-related assets, with some experts citing the possibility of an AI bubble as a risk factor for cryptocurrencies.

Why the Standoff Happened

Bitcoin's price performance has lagged behind positive news in the crypto sector, including regulatory advancements and growing adoption by financial institutions. Despite these developments, the market has failed to respond in kind, leading to skepticism among traders and investors according to market analysis.

The Federal Reserve's recent rate cuts, initially seen as a potential catalyst for a Bitcoin rally, have not delivered the expected results. Instead, the market has been grappling with a liquidity crunch and a lack of conviction among retail and institutional buyers as reported by financial analysts.

Further complicating the situation is the regulatory environment. The Commodity Futures Trading Commission (CFTC) has granted no-action relief to prediction market platforms like Polymarket and Gemini, allowing them to operate with some regulatory flexibility. This move has not only boosted confidence in the legitimacy of prediction markets but also highlighted the broader evolution of crypto trading mechanisms.

How Markets Reacted

Bitcoin has been range-bound between $80,000 and $100,000 for much of December, reflecting a lack of clear direction. Analysts at XS.com and 10X Research have noted that trading volumes have declined significantly, pointing to reduced speculative activity and cautious positioning.

Ethereum and XRP have also seen downward pressure, with Ethereum dipping below $3,000 and XRP falling below $2.00. The broader cryptocurrency market is currently in a state of extreme fear, according to the Crypto Fear & Greed Index, as investors brace for further volatility.

On the institutional side, Bitcoin ETFs have experienced mixed flows, with inflows and outflows alternating throughout the week. Fidelity's FBTC and Bitwise's BITB saw large outflows, while Grayscale's ETHE continued to struggle with net outflows as reported by financial analysts. In contrast, XRP ETFs have maintained a steady flow of capital, with cumulative inflows surpassing $1 billion as reported by market data.

What Analysts Are Watching

Market participants are closely monitoring macroeconomic developments, particularly the Federal Reserve's stance on interest rates and the trajectory of U.S. inflation. The central bank's cautious approach to future rate cuts has dampened bullish expectations, as investors now anticipate a slower easing cycle.

Another key focus is the continued growth of Bitcoin treasuries. Strategy, one of the largest corporate holders of Bitcoin, has continued purchasing large quantities of the cryptocurrency despite the price decline. However, some analysts argue that the influence of corporate treasuries on Bitcoin's price may be waning, with ETF demand now playing a more significant role.

Meanwhile, regulatory developments remain a wildcard. The CFTC's recent no-action letters to prediction market platforms suggest a more accommodative approach to innovation in crypto derivatives, but long-term clarity on regulation remains uncertain.

Risks to the Outlook

Bitcoin's price volatility continues to be a major concern. After reaching an all-time high of $126,000 in October, the cryptocurrency has since fallen to around $90,000, raising fears of a deeper correction. Michael Saylor, CEO of Strategy, has warned about the risks of a prolonged bear market, including liquidity stress and the challenges of building a Bitcoin-backed banking system.

The AI sector's performance is also a factor. Oracle's recent earnings miss and concerns about the sustainability of AI-related spending have led to a broader market selloff. This has had a cascading effect on risk assets, including cryptocurrencies.

In addition, the emergence of memecoins-often created as speculative or even satirical investments-has introduced new uncertainties. The Trump family's memecoin venture, for example, has drawn attention for its apparent profitability and legal gray areas. While these assets operate in a different space than Bitcoin, their popularity underscores the unpredictable nature of crypto markets.

What This Means for Investors

Investors are being advised to approach Bitcoin with caution. The current market environment is characterized by tight trading ranges, mixed sentiment, and heightened volatility. Analysts suggest that traders should closely monitor ETF flows, macroeconomic data, and central bank policy developments for potential turning points.

For long-term investors, the focus remains on structural trends such as regulatory clarity, institutional adoption, and technological innovation. While short-term volatility is expected, these factors may provide a foundation for future growth.

Short sellers, on the other hand, are being given a green light by options markets, which assign a roughly 15% probability of Bitcoin finishing the year below $80,000. This suggests that downside risk is not being fully priced into the market, offering potential opportunities for those willing to bet against a rebound.

As the year draws to a close, the path forward for Bitcoin remains uncertain. Whether it can break out of its current range and regain bullish momentum will depend on a complex interplay of macroeconomic conditions, institutional activity, and market sentiment.