thecryptobasic.com
Bitcoin could decline to as low as $48,000 this year, according to pricing signals from traders on the prediction platform Kalshi.
The market-implied odds point to growing caution as volatility and macroeconomic uncertainty continue to weigh on digital assets.
Key Points
- Prediction market Kalshi signals heightened downside risk, with significant probabilities of Bitcoin falling below $60,000, $55,000, and $50,000.
- Bitcoin remains roughly 47% below its October peak, highlighting persistent weakness after a failed recovery.
- Recent volatility was driven by forced liquidations, equity market swings, and ETF outflows, though some stabilization has emerged.
- Policy uncertainty and Federal Reserve developments are adding pressure on investor sentiment.
- Analysts note Bitcoin may be entering the bearish phase of its four-year cycle, with potential declines toward $50,000 before any recovery.
Prediction Market Signals Elevated Downside Risk
Recent Kalshi contracts show traders positioning for further weakness. Specifically, participants assign an 81% probability that Bitcoin falls below $60,000. Additionally, the odds of a drop below $55,000 stand at 69%, while the odds of a drop below $50,000 are 56%.
These figures suggest a market bracing for additional downside. The cautious outlook comes as Bitcoin struggles to regain sustained momentum after months of turbulence.
The shift in sentiment follows a sharp reversal from Bitcoin’s October high above $126,000. Since then, the broader trend has turned decisively downward.
Selling pressure intensified in recent weeks. On February 5, Bitcoin dropped below $70,000 before sliding to just above $60,000. Although prices later rebounded above $70,000, the recovery lacked conviction.
Consequently, Bitcoin has since traded in a relatively tight range between $66,000 and $72,000. Even after the bounce, the asset remains roughly 47% below its record high.
What’s Driving the Bitcoin Volatility?
Several forces have shaped the recent turbulence. For context, the sharp sell-off on February 5 was driven in part by forced liquidations.
When leveraged traders hit preset price thresholds, their positions are automatically closed, a process that can accelerate losses and amplify declines. However, liquidation activity has since moderated, easing immediate pressure.
At the same time, broader financial markets have contributed to instability. Crypto assets often move in tandem with U.S. technology stocks, which have experienced notable swings. Consequently, equity market volatility has spilled over into digital currencies.
Policy uncertainty has added another layer of concern. Late last month, President Donald Trump nominated Kevin Warsh to be the Federal Reserve chair, prompting investors to reassess the potential trajectory of U.S. monetary policy.
Furthermore, exchange-traded funds have influenced price action. Selling by Bitcoin ETF issuers triggered outflows, contributing to downward pressure. However, ETFs have recorded net inflows over the past three days, suggesting some stabilization in demand.
Focus Returns to Bitcoin’s Four-Year Cycle
Beyond short-term market swings, investors are once again focusing on Bitcoin’s historical four-year cycle. Approximately every four years, Bitcoin undergoes a “halving,” an event that reduces mining rewards and slows the pace of new supply.
In past cycles, halvings have preceded new highs, followed by significant corrections. The most recent halving took place in April 2024. Bitcoin has hit multiple highs since then and is now in a correction mode.
In a Wednesday media statement, Steven McClurg, CEO of Canary Capital, said 2026 could represent the bearish phase of the current cycle. He expects Bitcoin may fall to around $50,000 in the summer before improving later in the year.
Similarly, Markus Thielen of 10X Research projected last week that Bitcoin could approach $50,000.
Overall, prediction market pricing and analyst commentary reflect heightened caution. Ultimately, the trajectory for the coming months may depend on broader market conditions and policy developments that shape investor confidence.