There’s blood on the streets and crypto gamblers on Polymarket are betting that Bitcoin is far from its bottom.
Forty-five percent of traders on the prediction market Polymarket believe that Bitcoin’s price will fall below $45,000 before September. This spiked at a 65% chance in early European trading hours on Monday amid a market meltdown. It’s worth pointing out, though, that there’s currently less than $300,000 worth of bets in that pool.
Bitcoin fell below $55,000 overnight amid macroeconomic uncertainty and geopolitical tensions rising. This sell off continued, now currently at $50,000 with over $1 billion of liquidations taking place in the past 24 hours.
For the sake of comparison, Polymarket bettors gave Bitcoin a 5% chance of dropping below $45,000 before September just a few days ago. Even yesterday, when the turmoil had already started to roil markets, odds stayed between 5% and 15%.
But it isn’t just Bitcoin that Polymarket traders are bearish on.
According to one pool, Ethereum has just a 3% chance of being above $3,000 on August 9, four days from the time of writing. When this pool was created on Aug 2, bettors gave Ethereum a 75% chance of being priced above $3,000.
This comes as Ethereum takes a similar tumble to Bitcoin, falling 22% on the day and 33% over the week. At the time of writing, the Ethereum price has settled at $2,210. Ethereum accounted for $368 million worth of the liquidations that took place in the crypto market, according to CoinGlass. The vast majority, about $313 million, were long positions.
In response to the market upset, Polymarket has created a Market Crash tab that sits next to the U.S. election tab.
The chances of an emergency interest rate cut being announced by the Federal Reserve has spiked to 50% amid this market meltdown—up from 23% just yesterday. This has also seen bettors place money on the Federal Open Markets Committee (FOMC) announcing an interest cut of over 50 basis points in its September meeting, jumping to a 65% chance from 9% at the beginning of the month.
It’s more often been the case that analysts use CME FedWatch as a measure of trader sentiment. The FedWatch tool primarily relies on price data for 30-day federal fund futures contracts. CME is currently showing investors think there’s a 91.5% that the Fed will target a rate of 475 to 500 basis points—a cut 50 basis points lower than the current rate. The most likely target one week ago was 500 to 525 with 88.2% probability according to the CME tool.
In much more illiquid pools, Polymarket traders have given the U.S. a 30% chance of having a recession this year and a 20% chance of bank failure by September. But, it is important to note, very small amounts of capital have been traded on these markets so these figures are likely to move.
Edited by Stacy Elliott.
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### Conclusion:
In conclusion, the cryptocurrency market has experienced significant turmoil in recent days, with both Bitcoin and Ethereum facing downward pressure. Traders on platforms like Polymarket are increasingly bearish, with bets indicating a belief that these assets may still have further to fall.
The market reaction to macroeconomic uncertainty, geopolitical tensions, and other external factors has led to significant liquidations and price drops. Traders are closely watching key levels like $45,000 for Bitcoin and $3,000 for Ethereum as potential support or resistance zones.
Furthermore, the increased likelihood of emergency measures like an interest rate cut from the Federal Reserve underscores the evolving economic landscape. Traders and analysts alike are navigating a complex set of circumstances as they seek to predict future market movements.
As we move forward, it will be crucial to monitor these developments closely and stay informed about the latest news and analysis in the cryptocurrency space. Stay tuned for more updates and insights from DeFi Daily News to keep abreast of the rapidly changing market dynamics.
