Bitcoin Reclaims $110K Amid Institutional Support, But Tom Lee Warns of a Potential BTC 50% Drop

Bitcoin (BTC) lately surged previous the $110,000 mark, supported by rising institutional backing and the launch of spot Bitcoin ETFs. This is available in after every week of volatility that has seen BTC go under assist ranges.

Nevertheless, regardless of the bullish momentum, Tom Lee, chairman of BitMine, warns the flagship cryptocurrency might nonetheless endure a dramatic correction of as much as 50%.

BTC’s worth shifting sideways on the day by day chart. Supply: BTCUSD on Tradingview

Institutional Help Helps the Rise

Bitcoin’s newest climb towards the $110,000-plus vary is triggered by a major uptick in institutional curiosity. Merchandise such because the IBIT (iShares Bitcoin Belief) supply buyers simpler publicity to Bitcoin by way of conventional brokerage platforms.

Moreover, 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 distinct segment 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 Warning, A 50% Bitcoin (BTC) Drop May Be Subsequent

Nevertheless, Tom Lee affords a cautionary perspective that many market individuals 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 might be down 40 %.” Drawing on this dynamic, Lee maintains {that a} full 50 % collapse stays fully attainable.

The reasoning? Bitcoin has traditionally amplified stock-market strikes. Whereas 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 situation.

What This Means for BTC Traders

For buyers monitoring Bitcoin’s trajectory, the combo of bullish institutional alerts and bearish danger warnings calls for a balanced strategy.

On one hand, the ETF infrastructure and regulatory progress supply clear legitimacy for Bitcoin as an asset class. On the opposite, the chance of sharp drawdowns stays under-appreciated, suggesting that future volatility might proceed to outline Bitcoin’s long-term development trajectory.

Cowl picture from ChatGPT, BTCUSD on Tradingview

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