Bitcoin’s Pain Awaits… But Investors Still Buy the Dip?

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Fundstrat’s head of research, Tom Lee, has delivered a prognosis as gloomy as a Russian winter, advising investors to brace for a tumultuous 2026 before the stars align. He warns that political friction and tariff threats could inflict wounds on both stocks and Bitcoin, though he insists blockchain and AI will eventually prove their worth.

Tom Lee’s Call And The Near-Term Picture

Lee suggests that a more lenient Federal Reserve and the end of quantitative tightening might herald brighter days ahead. Yet, he likens the near-term outlook to a man stepping on a pin-unavoidable, painful, and oddly familiar.

He speculates a market correction in the “mid-teens range,” a phrase that sounds less like a financial forecast and more like a doctor’s estimate of a patient’s survival chances.

Geopolitical tensions, he claims, are as inevitable as a Cossack’s beard, while political divides threaten to turn the market into a stage for a tragicomedy. Reports hint that if the Fed softens its stance, a late-year rebound might follow, though one wonders if this is wishful thinking or a calculated gamble.

Reports also note the White House’s penchant for playing favorites, as if it were a schoolyard bully selecting which industries get the most attention.

2026 is shaping up to be similar to 2025:

– good fundamentals
– tariff escalations and White House picking “winners and losers”
– political divisiveness
– tailwinds from AI and blockchain
BUT: dovish Fed now and QT over

And so a painful decline may lie ahead but we would…

– Thomas (Tom) Lee (not drummer) FSInsight.com (@fundstrat) January 20, 2026

Deleveraging Still Hitting Crypto Liquidity

Lee argues that recent market crashes have left crypto markets as fragile as a house of cards built by a sleep-deprived child. Market makers, weakened by repeated forced exits, now move with the unpredictability of a drunken dancer.

He suggests that a new all-time high for Bitcoin would be a sign the market has weathered its storms, though he avoids mentioning the extreme price targets that once filled his earlier reports like a magician’s tricks.

Reports stress the difference between a technical bounce and a true rally, as if the distinction were as clear as the line between a joke and a tragedy.

Heavy Bitcoin Selloff

Despite warnings of impending pain, some investors remain as stubborn as a mule, viewing sharp pullbacks as opportunities rather than warnings. They seem to believe that the market’s volatility is merely a game of chess, with every move a calculated step toward victory.

Even as tariffs and global politics loom like a storm cloud, Lee and his allies advocate for disciplined dip buying, a strategy as reliable as a broken clock-sometimes right, often wrong.

“And so a painful decline may lie ahead but we would ‘buy the dip’”, Lee said in an X post.

Reports indicate that over $1.8 billion was wiped out in 48 hours as Bitcoin plummeted, a spectacle as dramatic as a Shakespearean tragedy with no clear resolution.

Bitcoin fell to roughly $88,500 during the slide, and Coinglass data revealed that most wiped positions were longs-traders who bet on higher prices, much like a gambler betting on a horse with a broken leg.

The selloff erased gains made earlier in the year, pulling crypto capitalization lower than a deflated balloon, in one of the biggest drops since mid-November.

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2026-01-21 22:11