Bitcoin Crash Warning Upgraded: Tom Lee Says 2026 May Face "Painful Decline" and Year-End Rebound Window

January 21 News, as the selling pressure in the cryptocurrency market continues to intensify, Bitcoin has fallen from near the $100,000 high and dropped below $90,000, with most mainstream altcoins also weakening. Tom Lee from Bitmine and Fundstrat warned that this correction might just be a prelude to a larger downtrend cycle in 2026, but if Bitcoin reaches a new all-time high within the year, a structural rebound could be expected by the end of the year.

In Wilfred Frost’s latest podcast interview, Tom Lee pointed out that the current market environment is highly similar to 2025, with high leverage liquidations, risk assets under pressure, and macro uncertainties stacking up, potentially causing most of 2026 to be in a “painful decline” zone. However, he also emphasized that if Bitcoin can break through previous highs, it would mean the market has fully digested the deleveraging shock from October last year, when a large number of leveraged positions were rapidly liquidated, causing intense turbulence across the entire crypto industry.

Judging from the price range, Fundstrat’s earlier warning was that Bitcoin might retest the $60,000 to $65,000 area, which is seen as a deep correction within a bull market rather than a long-term trend reversal. Tom Lee believes that similar declines often occur before the next rally, and for long-term investors, it could be an opportunity to reposition.

Behind this round of cryptocurrency plunge, macro factors have also played a key role. The U.S. Supreme Court failed to deliver a clear ruling on Trump’s tariff policies, triggering concentrated market pricing on trade and policy uncertainties; meanwhile, escalating tariff tensions between the U.S. and the EU have added additional pressure on risk assets. Trump recently signaled a potential easing on related issues, but short-term market doubts remain difficult to fully dispel.

Additionally, the Bank of Japan hinted that it will further raise interest rates in 2026 to address yen depreciation and inflation risks, which has pushed global liquidity expectations to tighten, exerting pressure on high-volatility assets like Bitcoin. Despite increased short-term volatility, trading data on Gate shows that some funds are repositioning at low levels, reflecting an early bet on a year-end rebound narrative. For investors focused on Bitcoin price forecasts and crypto market cycles, 2026 is likely to be a critical transition year of “decline first, then rise.”