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Fundstrat's head of research, Tom Lee, has advised investors to arrange for an approximate opening by 2026 before conditions improve later within the yr. He warned that political tensions and wage talks could trigger significant setbacks for each stocks and Bitcoin, whilst blockchain and AI remain long-term strengths.
Tom Lee's call and the short-term picture
Lee said a more dovish stance from the Federal Reserve and the top of quantitative tightening would set the stage for future gains.
He predicted a possible market correction within the mid-teens, estimating a decline of around 15% to twenty% in some unspecified time in the future.
He noted that geopolitics – including renewed tariff threats – and widening political divisions would slow a direct, broad rally. He reportedly still expects a rebound by year-end as monetary policy eases and liquidity returns.
According to reports, the White House's selective support for certain industries could lead to sectors on the forefront of the recovery.
The yr 2026 is more likely to be much like 2025:
– good basics 😀
– Tariff escalations and White House picking of “winners and losers.”
– political division
– Tailwind from AI and blockchain
BUT: Now expansionary Fed and QT over
So there could possibly be a painful decline ahead, but we’d… https://t.co/7Mp3rcOcP1
– Thomas (Tom) Lee (not drummer) FSInsight.com (@fundstrat) January 20, 2026
Deleveraging still has a negative impact on crypto liquidity
Lee argued that recent shortages have left crypto markets vulnerable. Market makers were weakened by repeated forced exits, making price movements more erratic.
He also noted that a brand new Bitcoin all-time high can be a very important signal that the market has overcome these stresses, although he didn’t repeat previous extreme price targets in his recent remarks.
Reports emphasize the difference between a technical upswing and a move supported by broader adoption and deeper institutional inflows.
BTCUSD is currently trading at $89,096. Chart: TradingView
Violent Bitcoin sell-off
Despite warnings that a painful decline could still occur, some investors aren't giving in completely. Parts of the market reportedly proceed to view sharp declines as buying opportunities fairly than exit signals.
Despite the uncertainty over tariffs and global politics, Lee and his camp imagine that disciplined dip buying – opened up over time – offers a greater likelihood than attempting to pinpoint an ideal bottom while fear dominates the headlines.
Image: MarketWatch Photo Illustration/iStock Photo
“So there could possibly be a painful decline ahead, but we’d buy the decline,” Lee said in an X post.
More than $1.8 billion was reportedly liquidated in 48 hours as Bitcoin lost ground.
Bitcoin sank to around $88,500 in the course of the decline, and Coinglass data showed that the vast majority of positions cleared were long positions – an indication that traders were prepared for higher prices.
The selloff worn out gains made earlier within the yr and caused crypto capitalization to fall significantly, leading to considered one of the biggest declines since mid-November.
Featured image from Allrecipes, chart from TradingView
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