Market Sentiment and Potential Bottoming
Bitcoin may be nearing a bottom as early as this week, according to insights from Tom Lee, chairman of BitMine, and Matt Hougan, chief investment officer at Bitwise Asset Management. This sentiment follows a recent period of significant market pressure, which saw Bitcoin briefly dip below $90,000, a level not seen in seven months.
During a CNBC interview, Lee attributed the current downward pressure on cryptocurrencies to the aftermath of a major liquidation event on October 10 and ongoing investor uncertainty regarding the U.S. Federal Reserve's December interest rate decision. He noted that signs of exhaustion are appearing in the market.
"I think that’s all creating this downside pressure. But I think the good news is there are signs of exhaustion," Lee stated. "I did speak with Tom Demar of Demar Analytics, and he thinks there are signs that would look like a bottom that could be occurring sometime this week."
Bitcoin (BTC) briefly traded below $90,000 on Tuesday, marking its lowest point since April, according to data from CoinGecko.
Earlier in the week, crypto industry executives informed Cointelegraph that the recent downturn in cryptocurrency markets was a result of multiple factors. These included outflows from exchange-traded funds, significant sales by long-term holders (whales), and heightened geopolitical tensions.
Generational Opportunity for Long-Term Investors
Matt Hougan echoed the sentiment that a market bottom is approaching, further suggesting that current price levels represent a "generational opportunity" and a "gift for long-term investors."
Hougan also identified several potential reasons for the market's current struggles. These include investor anxiety surrounding the economy, the valuations of artificial intelligence companies, and U.S. President Donald Trump's tariffs.
"I think we’re nearing a bottom. I look at this as a great buying opportunity for long-term investors. Bitcoin was the first thing to turn over before this broader market pullback. It was sort of the canary in the coal mine signaling that there was some risk in all sorts of risk-on assets," Hougan explained.
"I think it’ll be the first thing to bottom and I agree with Tom. We’re getting very close to that point. So, I think it’s an exciting opportunity again for people who are looking out a year or more into the future."
BitMine's Lee Predicts Bitcoin New High by Year's End
Bitcoin is presently trading around $90,718, which is approximately 28% below its all-time high of over $126,000 reached on October 6.
Despite the current pullback, Tom Lee is optimistic about Bitcoin's trajectory, predicting that it will recover all its losses and set a new all-time high by the end of the year. He anticipates that a rally in the stock market will help propel Bitcoin to these new heights.
"Between now and year end, you know, I’m pretty bullish on stocks. You know, this sort of weakness in the first half of November was what we expected, but as markets rally, I think that’s going to help propel Bitcoin to an all-time high."