Bitcoin Reclaims $110K Amid Institutional Support, But Tom Lee Warns of a Potential BTC 50% Drop
Bitcoin (BTC) not too long ago surged previous the $110,000 mark, supported by rising institutional backing and the launch of spot Bitcoin ETFs. This is available in after a week of volatility that has seen BTC go beneath assist ranges.
However, regardless of the bullish momentum, Tom Lee, chairman of BitMine, warns the flagship cryptocurrency may nonetheless endure a dramatic correction of as much as 50%.
Institutional Support Supports the Rise
Bitcoin’s newest climb towards the $110,000-plus vary is triggered by a vital uptick in institutional curiosity. Products such because the IBIT (iShares Bitcoin Trust) provide buyers simpler publicity to Bitcoin by way of conventional brokerage platforms.
Additionally, broader regulatory readability has enabled main banks and asset managers to deepen their crypto methods. This shift means that Bitcoin is steadily transitioning from a area of interest speculative asset to a extra mainstream funding car.
The rally has triggered renewed optimism round worth breakout potential towards the $120,000-plus area.
Tom Lee Sounds Caution, A 50% Bitcoin (BTC) Drop Could Be Next
However, Tom Lee affords a cautionary perspective that many market members could also be overlooking.
Tom argues that regardless of institutional adoption, Bitcoin stays extremely correlated with conventional fairness markets. In his phrases: “If the S&P is down 20 %, Bitcoin may very well be down 40 %.” Drawing on this dynamic, Lee maintains that a full 50 % collapse stays completely doable.
The reasoning? Bitcoin has traditionally amplified stock-market strikes. While ETFs and institutional flows could soften the narrative, they don’t eradicate Bitcoin’s structural volatility.
Lee additionally factors out the breakdown of the classical four-year Bitcoin market cycle, warning that we could also be getting into a “longer cycle” with extra excessive drawdowns.
His forecast nonetheless anticipates Bitcoin reaching between $200,000 and $250,000 by year-end, but a 50 % correction from these ranges would land $100,000–$125,000. If the present $110,000 peak is already the highest, a fall towards roughly $55,000 is inside his state of affairs.
What This Means for BTC Investors
For buyers monitoring Bitcoin’s trajectory, the combination of bullish institutional indicators and bearish threat warnings calls for a balanced method.
On one hand, the ETF infrastructure and regulatory progress provide clear legitimacy for Bitcoin as an asset class. On the opposite, the chance of sharp drawdowns stays under-appreciated, suggesting that future volatility may proceed to outline Bitcoin’s long-term development trajectory.
Cover picture from ChatGPT, BTCUSD on Tradingview
