Will 2026 usher in a "painful decline"? See how Tom Lee responds to his own warning with action

Bitcoin drops below $90,000, market anxiety intensifies. Fundstrat research head Tom Lee recently warned that 2026 could largely be in a “painful decline” zone, but a structural rebound is expected by the end of the year. Interestingly, his company BitMine has recently spent $110 million to heavily buy Ethereum, an action that seems to be responding with real money to his optimistic stance.

The Logic Behind the Warning

Tom Lee’s concerns are not unfounded. The current market faces multiple pressures:

• Policy Uncertainty: The U.S. Supreme Court failed to deliver a clear ruling on Trump’s tariff policies, and US-EU trade tensions are escalating, leading to concentrated market pricing on policy directions
• Liquidity Tightening Expectations: The Bank of Japan hinted at further rate hikes in 2026, tightening global liquidity expectations, which suppresses high-volatility assets like Bitcoin
• Similar Market Structure: The current environment closely resembles 2025, with high leverage liquidations and risk assets under pressure, potentially replaying the deleveraging shock of October last year

From a price perspective, Tom Lee expects Bitcoin to retest the $60,000 to $65,000 range, seen as a deep correction within a bull market. But this expectation has not stopped his strategic positioning.

The Gap Between Current Situation and Expectations

Current Market Performance

Bitcoin has fallen from near $100,000 to below $90,000, with most mainstream altcoins weakening in tandem. However, it’s noteworthy that trading data on Gate shows some funds are repositioning at lower levels.

Tom Lee’s Contradictory Signals

This is the most interesting part. Tom Lee warns that the market may face a “painful decline,” yet he has led BitMine to buy 35,628 Ethereum in the past week, costing $110 million. What does this action reveal?

His true thinking might be this: Short-term adjustments are indeed likely, but this is precisely an opportunity for long-term investors to reposition. Similar declines often occur before the next rally. In other words, he is validating his judgment through action—if he truly were bearish for the whole year, he wouldn’t be making large purchases at this moment.

Where Is the Critical Turning Point?

Tom Lee emphasizes a key condition: If Bitcoin can break through previous highs, it will mean the market has fully digested last October’s deleveraging shock.

This implies:

• Breaking historical new highs = market has recovered health, deleveraging risks are fully released
• Failure to break through = continued pressure, possibly entering a deeper correction
• Year-end rebound window = an expectation based on the above conditions, not a certainty

For long-term investors, the current pullback is not the end but a window to reassess risk and reward.

Summary

Tom Lee’s warning reflects genuine market anxiety, but his strategic actions are also worth noting. 2026 is likely to be a critical transition year of “drop first, rise later”—macroeconomic pressures will persist in the first half, but if Bitcoin can break through previous highs, the logic for a year-end rebound will hold. The key is whether this correction can be absorbed by the market and whether policy signals turn positive. For holders, the current sharp decline is essentially a risk alert, but it also hints that opportunities for low-level accumulation are emerging.