Prediction market traders are increasing their bets on a continued pullback in Bitcoin. With prices approaching $65,000 this week, multiple contracts on Kalshi and Polymarket indicate that the market believes this correction is not yet over.

The probability of it falling below $55,000 this year has increased.

Kalshi's contracts show that traders currently believe there is a 66% probability that Bitcoin will fall below $55,000 this year, about a 50% probability that it will fall below $50,000, and a 31% probability that it will fall below $40,000.

Pricing on Polymarket is similar. Contracts on that platform indicate a 67% probability of Bitcoin falling below $55,000 this year, and a more than 50% probability of it falling below $50,000.

US ETFs continue to see outflows.

The recent rise in bearish sentiment coincides with continued outflows from US-listed Bitcoin ETFs. SoSo Value data shows that US-listed Bitcoin ETFs experienced net outflows of $2.4 billion in May, followed by another $1 billion in the first two trading days of June.

The withdrawal of funds from ETFs is seen as one of the direct signals of cooling institutional demand. The article also mentions that some investors have recently shown a preference for rapidly rising AI stocks, which has also diminished Bitcoin's appeal to new capital.

Some funds are shifting to stablecoins

Despite increased bearish bets, funds haven't completely withdrawn from the crypto market. The article states that some funds are shifting to stablecoins like USDT and USDC, indicating that investors prefer to temporarily hedge on-chain rather than exit the market outright.

In cross-asset comparisons, Polymarket traders currently give only a 30% probability that Bitcoin will outperform gold in 2026. The article mentions that gold has risen approximately 33% over the past year, while Bitcoin has fallen approximately 37% during the same period.