A recent appearance CNBC “Squawk Box,” Tom Lee (Fundstrat Capital CIO/Head of Research) suggested Bitcoin might still be a long way from a full recovery. During the January 13 segment, Lee spoke about the broader market concerns—such as inflation, bond yields, and earnings—before drawing a parallel to the crypto space, specifically Bitcoin’s trajectory.
Bitcoin could crash into the $50,000 range?
“Bitcoin is down roughly 15% from its highs which for a hyper volatile asset is a normal correction and following global liquidity. We are early in the halving cycle,” Lee said that such price swings are not uncommon in digital assets. In addition, Lee elaborated further on the technical indicators that indicate future volatility. “One level would be $70,000.”
It is possible but less probable that a crash in the $50,000’s will occur. “It could go as low as the $50,000s. But that’s again not a new level. That’s where it touches before it begins to rally,” Lee said.
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Lee paints the picture of two possible price movements for Bitcoin. “$50,000s,” The climb could, according to him, reach a height of up to 4,000 feet. “maybe $200,000 or $250,000.” The long-term investors should not be discouraged by the possible downward movement, he said.
“Bitcoin is something you need to be long-term focused on. I don’t think anyone is losing money buying here at $90,000. If they are trying to time this, maybe they get lucky and it goes to $70,000 but to me, Bitcoin could be significantly higher this year, maybe $200,000 or $250,000. So, I think $90,000 is still a great entry point,” Fundstrat’s CEO made the following statement.
Lee’s comments came as part of a larger discussion about market dynamics. Conversation began with recent equity market dips and whether investors might be scared by the Federal Reserve’s pause in rate reductions. Lee pointed to upcoming inflation data as a critical pivot, explaining, “We’ve been correcting now for almost a month… I would like to see CPI Let’s say, earnings are below 2.5%. This would be a great way to boost confidence in the market on top earnings.”
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He then highlighted what he viewed as short-term noise in the inflation statistics. This was due to external events, such as fires and hurricanes. “The hurricanes last year have muddled some of the inflation quality because for instance, hotel reservations would go up… It will muddle used car prices as well,” Lee also added that, once these anomalies have cleared, the overall rate of inflation could be lower.
In discussing Federal Reserve policyLee kept a neutral stance and said, “I think the best case is the Fed doing one cut because the economy’s strong enough and they are still dovish… They will make their way to neutral. If they push the cuts to 2026 and 2027, that’s a longer rate to support markets.” He thinks that markets are still sensitive to any policy uncertainties, especially under a newly elected administration.
Lee, when asked if stocks are overvalued compared bond yields. “To me, the ten-year even if it gets to 5%, is a 20 PE multiple on a ten-year bond… The median PE is 17 times. I think stocks are giving you much better value than a bond right now.”
BTC was trading at $95,618 as of the time this article went to press.
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Source: www.newsbtc.com
