Bitcoin's Short-Term Price Outlook Amid Polymarket’s 62% Probability of Falling Below $100K in 2025

Bitcoin’s price action in late 2025 has become a battleground between bearish sentiment and structural resilience. With Polymarket assigning a 62% probability that Bitcoin will remain below $100,000 by year-end, the market is grappling with a collision of psychological fear and on-chain selling dynamics. This analysis dissects the forces at play, offering a framework for investors to navigate the uncertainty.

Market Psychology: A Deepening Chasm of Fear

The Bitcoin Fear and Greed Index has plunged to historic lows, hitting 4 in August 2025—a level not seen since the 2018 bear market [1]. This extreme fear is not merely anecdotal; it is reflected in retail behavior. Social media platforms like Twitter and Reddit are awash with panic-driven commentary, while trading volumes on centralized exchanges have surged as short-term holders liquidate positions [2]. The index’s trajectory—from a low of 24 in March to 47 in August—underscores a market in distress, with investors increasingly viewing Bitcoin as a high-risk asset amid geopolitical tensions and macroeconomic volatility [3].

Yet, this fear is not universal. Institutional investors, particularly large ETFs and corporate treasuries, have removed nearly 1.98 million BTC from the market, signaling a contrarian stance [4]. This divergence mirrors patterns from late 2021, where retail panic preceded a $69,000 rebound. The key question is whether this time is different—or if history is about to repeat.

On-Chain Metrics: A Tale of Two Cohorts

On-chain data reveals a fractured market. The Taker-Buy-Sell-Ratio (TBSR) has fallen to 0.945 in late August 2025, indicating stronger selling pressure [1]. Meanwhile, the MVRV Z-Score at 2.5 and a 92% profit ratio suggest that long-term holders remain anchored to their positions, viewing Bitcoin as undervalued at current levels [2]. This dichotomy highlights a critical dynamic: while retail investors are fleeing, whales and institutions are accumulating.

The NUPL ratio (0.72) and SOPR (1.0) further complicate the narrative. A NUPL above 0.5 implies overbought conditions, yet SOPR’s neutrality suggests limited speculative leverage, pointing to a more mature market structure [3]. Exchange inflows have also hit multi-year lows, with Bitcoin’s 30-day moving average of inflows declining sharply [4]. This trend indicates reduced short-term selling pressure, as fewer coins are being moved to trading platforms for liquidation.

However, the ETF outflows tell a different story. U.S. spot Bitcoin ETFs faced a $1.2 billion outflow by late August 2025, coinciding with $500 million in long liquidations [5]. This exodus contrasts with Ethereum’s $2.85 billion in ETF inflows, reflecting a broader institutional reallocation toward Ethereum’s yield advantages [5].

Polymarket’s 62% Probability: A Contrarian Signal?

Polymarket’s 62% probability of Bitcoin staying below $100K by year-end is a product of crowd-sourced sentiment, influenced by geopolitical risks and macroeconomic headwinds [1]. Yet, historical data suggests that extreme fear often acts as a contrarian signal. For instance, the index’s plunge to 4 in August 2025 mirrors its behavior in March 2025, which preceded a 7-week rally [2].

The $100,000 level is both a psychological and technical threshold. On-chain metrics show that Bitcoin’s MVRV ratio is at -3.37%, implying it is undervalued on average [3]. If institutional buying continues to outpace retail selling, this level could become a catalyst for a rebound. However, the fragile liquidity environment—exacerbated by weekend trading and macroeconomic events—remains a risk [5].

Strategic Implications for Investors

For investors, the current environment demands a nuanced approach. Short-term holders should remain cautious, as the TBSR and NUPL suggest elevated distribution risks. However, long-term investors may find value in Bitcoin’s undervaluation metrics and institutional accumulation. The key is to monitor closing prices and resistance levels, particularly the $100,000 mark, which could act as a pivot point [2].

The divergence between retail fear and institutional confidence is a critical signal. If history is any guide, periods of extreme fear often precede sharp rebounds. That said, the market’s fragility—exacerbated by ETF outflows and geopolitical tensions—means volatility is likely to persist.

Conclusion

Bitcoin’s short-term outlook is a tug-of-war between bearish sentiment and structural resilience. While Polymarket’s 62% probability reflects a cautious market, on-chain data and historical patterns suggest that this fear could be a buying opportunity for those with a long-term horizon. Investors must balance the immediate risks with the potential for a contrarian rebound, keeping a close eye on both psychological indicators and on-chain dynamics.

Source:
[1] Bitcoin Fear and Greed Index: Market Sentiment Analysis ..., [https://www.gate.com/crypto-wiki/article/bitcoin-fear-and-greed-index-market-sentiment-analysis-for-2025]
[2] Bitcoin's 7-Week Lows: Is This a Buying Opportunity or a ..., [https://www.ainvest.com/news/bitcoin-7-week-lows-buying-opportunity-warning-sign-2508/]
[3] Bitcoin's $110K Support: A Contrarian's Playbook Amid ..., [https://www.bitget.com/news/detail/12560604932884]
[4] Bitcoin's Late-Cycle Dynamics: Understanding Sell-... [https://www.ainvest.com/news/bitcoin-late-cycle-dynamics-understanding-sell-pressure-profit-realization-2508/]
[5] Bitcoin's Strategic Rebound: Technical and On-Chain... [https://www.ainvest.com/news/bitcoin-strategic-rebound-technical-chain-signals-point-resumption-bullish-momentum-2508/]