Polymarket Big Data Reveals: 6 Market Truths About Liquidity Depth Greater Than and Less Than

According to PANews’s in-depth analysis of 295,000 historical markets on the Polymarket platform, an unexpected phenomenon has emerged—markets that seem to “predict everything” have actually split into two completely different worlds. Among them, capital flow and trading activity are not simply determined by the number of markets but instead show a stark contrast of “greater than” and “less than.” Understanding the truth behind these liquidity dynamics is crucial for any participant seeking value in prediction markets.

Markets with Cycles Less Than 1 Day: The “MEME Coin Battlefield” for Traders

On Polymarket, ultra-short-term markets are experiencing explosive growth. There are 67,700 markets with cycles less than 1 day, accounting for 22.9%; while markets with cycles less than 7 days total 198,000, making up 67.7%. However, the liquidity situation in these short-term markets is concerning.

Among 21,848 ongoing short-term markets, 13,800 have zero 24-hour trading volume, with a liquidity ratio of 63.16%. Does this scene sound familiar? During the MEME coin frenzy on the Solana chain, most of the tens of thousands of tokens were similarly neglected. The difference is that the event life cycle in prediction markets is definite, whereas MEME coins are unpredictable.

In these short-term markets, over half have liquidity less than $100. Market classification shows that sports events and crypto predictions dominate, as these types of events are simple and mature to judge (e.g., a token’s 15-minute price change, a team’s victory, etc.). Data indicates that the average trading volume for sports events with cycles less than 1 day reaches $1.32 million, while crypto predictions only $44,000. This means that if you want to profit from short-term crypto price predictions, the existing liquidity simply cannot support it.

Markets Longer Than 30 Days: The True Lowland for Capital Accumulation

Contrasting sharply with the numerous short-term events, long-term markets are relatively scarce. Markets with cycles from 1 to 7 days total 141,000, but those longer than 30 days are only 28,700. Yet, these “scarce” long-term markets attract the most capital.

The average liquidity in markets over 30 days reaches $450,000, 45 times that of markets within 1 day (around $10,000). This indicates that institutional investors and large funds clearly prefer long-term predictions over short-term speculation.

In long-term markets (over 30 days), aside from sports, other categories show higher average trading volumes and liquidity. The US politics category is the most favored by capital, with an average trading volume of $28.17 million and an average liquidity of $811,000. The “Others” category (covering pop culture, social topics, etc.) also performs well, with an average liquidity of $420,000.

In crypto predictions, capital also tends toward long-term strategies. Investors prefer to forecast “Will BTC break $150,000 by the end of the year” or “Will a certain token’s price fall below a specific level within several months,” making crypto predictions more akin to options hedging tools rather than short-term speculation.

The “Dramatic Contrast” in Liquidity in Sports Markets

Sports predictions are a major contributor to Polymarket’s daily active markets, with 8,698 active markets accounting for about 40%. However, within the same category, there is a huge gap in liquidity distribution across different cycles.

Markets with cycles less than 1 day in sports prediction have an average trading volume of $1.32 million; medium-term markets with cycles between 7 and 30 days average only $400,000; while ultra-long-term markets over 30 days surge to $16.59 million. This “V-shaped” distribution reflects a reality: sports prediction participants on Polymarket either pursue “immediate feedback” or engage in “season-long betting,” while mid-term event contracts are marginalized.

The “Cold Start Dilemma” in Real Estate Predictions

The rule that longer cycles have more liquidity generally applies across most market categories. However, Polymarket’s recent launch of real estate prediction markets breaks this logic.

Real estate predictions should have higher certainty and cycles longer than 30 days, but they face an awkward daily trading volume of only a few hundred dollars. In contrast, the US 2028 presidential election prediction far exceeds other markets in both liquidity and trading volume.

This reflects the “cold start trap” faced by new asset classes (especially niche, highly specialized categories). Real estate predictions require participants to have higher expertise and cognitive thresholds, and retail enthusiasm remains at the “spectator” stage. Coupled with the inherently low volatility of real estate markets and the lack of frequent event-driven activity, speculative interest is further suppressed. Ultimately, professional players face no counterparties, while amateurs dare not enter, creating a deadlock.

Capital Concentration: A Tiny Few Markets Account for Over Half of Trading Volume

Analyzing markets by trading volume reveals an even more startling truth. Markets with capital accumulation capacity (over $10 million) are few—only 505—but account for 47% of total trading volume.

Meanwhile, the largest number of markets—those with trading volumes between $1,000 and $100,000—total 156,000 contracts but contribute only 7.54% of trading volume. For most prediction contracts lacking top-tier narratives, “going live and then zeroing out” is the norm. Liquidity is not evenly distributed; instead, it concentrates around a few super-events spotlight.

Geopolitical Sector: An Emerging Force with Over 29.7% Active Ratio

From the efficiency indicator of “current active number / historical number,” the “geopolitical” sector is rapidly rising. This sector has only 2,873 total historical event contracts but currently has 854 active ones, with an active ratio of 29.7%, the highest among all sectors.

This data indicates that the addition of new geopolitical contracts is accelerating, making it one of the most关注 topics for prediction market users. Recently, many geopolitical-related contracts have seen frequent whale address transactions, further confirming this trend.

Conclusion: Liquidity Is the Ultimate Truth of Prediction Markets

Prediction markets are evolving from a “predict everything” utopia into an ecosystem of highly specialized financial tools. Whether as a “high-frequency casino” in sports or as a “macro hedge” in politics, their ability to capture liquidity depends on—either providing immediate dopamine feedback or offering deep macro strategic space.

Markets lacking narrative density, with feedback cycles that are too long and insufficient volatility, are destined to struggle to survive in decentralized order books.

For participants, recognizing that “greater than” liquidity depth signifies real value, while markets below a certain scale contain traps, is more critical than blindly chasing “100x predictions.” In the prediction market arena, where liquidity is abundant, value is discovered; where liquidity dries up, only traps remain.

Perhaps this is the ultimate insight behind the 295,000 market data points that should be remembered.