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Options traders are suddenly bearish on %Bitcoin (CRYPTO: $BTC ).

A growing number of traders are betting that the largest %Cryptocurrency by market capitalization will be trading below $100,000 U.S. by year's end.

Options traders placing bets on the %Polymarket decentralized platform now see a greater than 50% chance of Bitcoin dropping into five figures by the start of 2026.

The bearish outlook comes after recent economic data shows the U.S. economy slowing and the potential emergence of stagflation.

Stagflation, which is when inflation rises despite the economy slowing, is widely viewed as a worst-case scenario for risk assets such as stocks and crypto.

With worries resurfacing, Bitcoin has seen its price slide in recent trading sessions, falling as low as $112,000 U.S. from an all-time high of $123,000 U.S. reached in mid-July of this year.

BTC is currently trading at $114,250 U.S., having gained about 22% on the year.

A weak U.S. labour market has ramped up expectations for the U.S. Federal Reserve to begin cutting interest rates in September.

But traders are trying to decide if rate cuts driven by economic weakness will help risk assets such as cryptocurrencies.

Currently, Wall Street is bracing for some pain in this year's second half, with institutional and momentum traders now selling stocks and crypto.

Bets on Bitcoin falling below $100,000 U.S. is a sharp reversal from even a few weeks ago, when futures traders were betting on the price of BTC reaching $200,000 U.S. or higher.

The current outlook has led altcoins such as XRP (CRYPTO: $XRP ), %Solana (CRYPTO: $SOL ) and %Dogecoin (CRYPTO: $DOGE ) to also fall in recent days.