Bitcoin’s Worst Sell-Off May Be Its Launchpad, Says Fundstrat’s Tom Lee

Bitcoin’s recent dip below its 200-day moving average has rattled traders, but market veteran Tom Lee, Co-Founder and Head of Research at Fundstrat Global Advisors, believes the downturn may be temporary - and that macroeconomic “headwinds could soon turn into tailwinds.”

The leading cryptocurrency fell below the key technical threshold amid widespread deleveraging across crypto markets, following what Lee described as “the biggest deleveraging in history” on October 10. Bitcoin currently trades near $103,200, down about 5% in the past week.

Speaking to CNBC, Lee attributed the decline to tightening liquidity conditions, the U.S. government shutdown, and a hawkish Federal Reserve, all of which have weighed on investor sentiment. “Bitcoin is very sensitive to market liquidity and also perceptions about risk appetite,” he said.

“Headwinds Become Tailwinds”

Despite short-term weakness, Lee said he remains constructive on Bitcoin’s outlook, suggesting that as the current macro pressures ease, they could fuel a recovery. “Headwinds become tailwinds when you can resolve these things,” he noted, comparing the current setup to past market cleanups that eventually paved the way for rallies.

Read More:

Institutional Sell-Off: Bitcoin and Ethereum ETFs Hit With Heavy Outflows

Lee also pointed to broader equity trends as a positive signal, observing that when stocks post six straight months of gains, the following month is historically flat to positive – a pattern that could spill over into crypto markets.

Prediction Markets Stay Bullish

Retail sentiment also appears to favor a rebound. On Myriad, a prediction platform built by Decrypt’s parent company Dastan, traders are giving Bitcoin a 64% chance of revisiting $115,000 before it dips to $85,000. For Ethereum, users assign a 63% probability of reaching $4,500 before falling to $2,500.

Both cryptocurrencies have shown tentative recovery signs in the past 24 hours – Bitcoin up 1.3% and Ethereum up 2.6% — suggesting that traders are cautiously returning to risk assets.