Bitcoin fell below $65,000 over the weekend before stabilizing Monday around $65,900. The bitcoin market cap dropped to $1.31 trillion—15th globally—sliding behind the Vanguard S&P 500 ETF.
That’s a $440 billion loss this year.
Traders on Polymarket ramped up bearish bets as prices wobbled. Odds that Bitcoin crashes below $55,000 climbed to 72% Monday, with $1.2 billion in volume on the platform. Other bets show 67% odds for sub-$50,000 and 47% for sub-$45,000, with trading volumes of $170,000 and $1.4 billion respectively.
The bitcoin market cap slide pushed BTC behind VOO in the global rankings during the ongoing crypto rout, according to 8marketcap data. Bitcoin started the year near $90,000. Now it trades 27% lower.
Question is whether $55,000 holds or breaks.
**Bitcoin Market Cap Down 25% Year-to-Date**
Bitcoin’s market capitalization shed roughly $440 billion this year—about a quarter of its value. The total crypto market cap followed the same script, dropping $760 billion or 24.5%, per CoinGecko data.
At current prices, Bitcoin gained just 22% over five years. That volatility reignites debate about its role as an inflation hedge. Compare that to equities or gold over the same period.
Not exactly the asymmetric bet many expected.
Analysts at Standard Chartered project Bitcoin could fall to $50,000 before potentially recovering toward $100,000. CryptoQuant called $55,000 the “ultimate market bottom” in recent analysis.
On Monday, CryptoQuant noted Tether faced extreme liquidity stress—a signal reminiscent of the 2022 market bottom. Stablecoin exchange flows show declining marginal buying power. Net USDT inflows to exchanges collapsed from $616 million in November 2025 to just $27 million recently.
“This contraction indicates reduced liquidity ready to be deployed into crypto markets,” CryptoQuant said in a report shared with Cointelegraph.
Binance now holds 65% of centralized exchange stablecoin reserves as outflows cooled across the sector.
**What the Data Shows**
Polymarket’s 72% odds for sub-$55,000 Bitcoin align with institutional forecasts. Standard Chartered sees $50,000 as the next support. CryptoQuant points to $55,000 as the floor based on on-chain metrics.
Even as bitcoin market cap contracted, some analysts highlighted long-term value. Bitcoin advocate Pierre Rochard called it the “most undervalued asset in the world” in a Sunday post on X.
A Coinbase survey found roughly 70% of institutional investors view Bitcoin as undervalued when priced between $85,000 and $95,000. They noted continued underperformance relative to precious metals and equities.
The split between current sentiment and institutional surveys creates tension. Institutions see value above $85,000. Bitcoin trades at $65,900. That’s a 23% gap.
Meanwhile, the liquidity crunch tells a different story.
**Historical Context Matters**
Bear markets in crypto typically see 60-80% drawdowns from peak to trough. Bitcoin’s 27% decline from $90,000 sits well within historical norms. The 2022 cycle saw a 77% crash from $69,000 to $15,500.
Current price action mirrors mid-cycle corrections rather than capitulation bottoms. Those usually come with funding rates deep negative, exchange reserves spiking, and on-chain metrics screaming oversold.
None of that exists yet.
What does exist: declining stablecoin inflows, concentrated exchange reserves at Binance, and prediction markets pricing in further downside. The $55,000 level emerged as the consensus target across multiple data sources.
Hold $65,000 and Bitcoin builds a base. Break it and $55,000 comes into play fast. The Polymarket odds suggest traders expect the latter.
Tether’s liquidity stress adds another variable. When the largest stablecoin faces pressure, it typically signals broader market stress. The 2022 parallel isn’t perfect, but the pattern rhymes.
**The $55,000 Question**
Every analyst, platform, and prediction market points to $55,000 as the critical level. Standard Chartered sees it as a stop before $50,000. CryptoQuant calls it the ultimate bottom. Polymarket traders bet 72% it breaks.
Bitcoin’s five-year return of 22% complicates the narrative. That’s lower than the S&P 500 over the same period. The inflation hedge argument weakens when equities outperform.
Institutional buyers see value above $85,000, but current prices suggest the market disagrees. That disconnect creates opportunity for contrarians or validates the bears—depending on who’s right about $55,000.
For now, liquidity stress dominates. USDT inflows crashed 96% from November highs. Exchange reserves concentrate at one venue. Prediction markets price in 28% more downside.
The bitcoin market cap ranking at 15th globally—behind a single equity ETF—captures the moment. Bitcoin slipped from top-10 territory as traditional finance assets held ground.
Next test: $65,000. Hold that and the $55,000 narrative fades. Break it and Polymarket’s 72% odds start looking conservative. All eyes on whether buyers defend current levels or step aside.
