When Will Bitcoin Crash? Prediction Markets Price in Significant Downside Risk for 2026

Market participants are increasingly focused on one critical question: when will Bitcoin experience its next major crash? Recent data from leading prediction platforms reveals a stark shift in sentiment, with traders now assigning substantial probabilities to various crash scenarios throughout 2026 rather than near-term recoveries to $100,000.

The probability landscape has fundamentally transformed since October 2025. While prediction markets once heavily favored Bitcoin’s rapid return to six-figure levels, current trading activity tells a vastly different story about downside risks and extended consolidation.

Prediction Markets Now Betting on Major Bitcoin Crash Scenarios

As of late January, the outlook for Bitcoin’s near-term trajectory has deteriorated significantly. Prediction market participants show minimal confidence in a quick bounce back to $100,000, with less than 10% of traders betting on this occurring before February.

Polymarket data shows: ~6% probability BTC reaches $100,000 before January 31 Kalshi data shows: ~7% probability of a six-figure breakthrough by month-end

Bitcoin’s recent high of $97,900 on January 14 remains stubbornly below the psychological $100,000 level that defined 2025’s bullish narrative. The asset last traded above this threshold on November 13, before the sharp selloff reset market expectations entirely.

Rather than focusing on upside targets, market participants are now actively positioning for crash scenarios. The shift reflects growing conviction that Bitcoin faces extended pressure through mid-year at minimum.

Traders Increasingly Expect Extended Decline Rather Than Rapid Recovery

The crash risk scenarios attracting trader attention span multiple severity levels:

Moderate downside: Roughly 65% odds Bitcoin falls to $80,000 (approximately 18% crash from current levels)

Significant crash: 54% probability of a $70,000 bottom during 2026 (representing a 28% decline)

Severe correction: 50% odds Bitcoin crashes to $65,000 levels

Extended crash: 42% probability of a $60,000 bottom (roughly a 40% crash from current prices)

These probability distributions suggest traders expect prolonged consolidation and multiple test periods at lower support levels before any sustained recovery attempt. Current Bitcoin pricing near $84,600 already reflects weakness from the January peak, validating near-term bearish sentiment.

Kalshi participants assign 65% odds that Bitcoin remains below $100,000 through June 2026—implying market consensus expects the crash and consolidation phase to persist well into the second half of the year.

Risk of Bitcoin Crash Below Strategy’s $75,979 Cost Basis Reaches 75%

Prediction market attention has also focused on specific institutional price thresholds. Strategy, a major Bitcoin holder, maintains an average purchase price of $75,979 per BTC across its treasury holdings.

Market data reveals a critical vulnerability: 75% probability that Bitcoin will trade below Strategy’s cost basis during 2026. This suggests traders believe the crash will push prices near or through an important institutional support level.

Despite these bearish crash probabilities, prediction markets remain confident that Strategy itself will not capitulate under pressure. Less than 26% odds are assigned to the firm selling Bitcoin in 2026, and 84% probability that Strategy maintains more than 800,000 BTC holdings through December 31. This disconnect—anticipating a crash below cost basis while expecting institutional holders to persevere—reflects confidence in accumulation strategies even amid downside turbulence.

Macro Uncertainties and Geopolitical Risks Drive Bitcoin Crash Outlook

The elevated crash probabilities pricing into prediction markets stem from broader macroeconomic headwinds. Tightening financial conditions, rising bond yields, and persistent geopolitical risks have collectively shifted the risk-reward calculus for short-term Bitcoin participants.

Long-term institutional conviction remains intact despite the crash outlook. However, near-term traders are prioritizing capital preservation over aggressive positioning. The focus has shifted to waiting for clearer macroeconomic catalysts, liquidity relief, or renewed exchange-traded fund inflows before reassessing recovery potential.

The binary outcome has become clear: prediction market participants believe Bitcoin will either experience a significant crash in coming weeks or enter an extended holding pattern—but a rapid push back to $100,000 lacks conviction in current market pricing.

For traders and investors evaluating 2026 exposure, the message from these prediction platforms is unambiguous: crash risk scenarios now dominate short-term positioning, with meaningful downside probabilities across multiple severity levels before any sustainable recovery emerges.