Bitcoin Pain May Come First — Tom Lee Says He’d Still Buy The Dip

Fundstrat’s head of research, Tom Lee, has told investors to prepare for a rough opening to 2026 before conditions improve later in the year. He warned that political friction and tariff talk could trigger meaningful setbacks for both stocks and Bitcoin, even as blockchain and AI remain long-term strengths.

Tom Lee’s Call And The Near-Term Picture

Lee said a more dovish stance from the US Federal Reserve and the end of quantitative tightening set the stage for gains later on.

He put a possible market correction in the mid-teens range, estimating a pullback of about 15% to 20% at one stage.

He pointed to geopolitics — including renewed tariff threats — and rising political divides as brakes on an immediate, broad rally. Reports note he still expects a late-year rebound if policy eases and liquidity returns.

Reports say the White House’s selective support for certain industries could tilt which sectors lead the recovery.

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Deleveraging Still Hitting Crypto Liquidity

Lee argued that recent squeezes have left crypto markets fragile. Market makers have been weakened by repeated forced exits, and that has made price moves jumpier.

He also noted that a fresh Bitcoin all-time high would be an important signal that the market has worked through those stresses, though he didn’t repeat earlier extreme price targets in his latest remarks.

Reports stress the difference between a technical bounce and a move backed by wider adoption and deeper institutional flows.

Heavy Bitcoin Selloff

Despite warnings that a painful decline may still unfold, some investors are not backing away entirely. Reports say parts of the market continue to view sharp pullbacks as buying chances rather than exit signals.

Even with uncertainty around tariffs and global politics, Lee and his camp believes disciplined dip buying — spread out over time — offers better odds than trying to time a perfect bottom while fear dominates headlines.

Image: MarketWatch photo illustration/iStock photo

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

Reports indicate that more than $1.8 billion was liquidated over a 48-hour stretch as bitcoin lost ground.

Bitcoin sank to roughly $88,500 during the slide, and Coinglass data showed the bulk of wiped positions were longs — a sign that traders had been positioned for higher prices.

The selloff erased gains made earlier in the year and pulled crypto capitalization sharply lower, in one of the biggest drops since mid-November.

Featured image from Allrecipes, chart from TradingView