Tom Lee: Bitcoin’s October Flash Crash Clears Path for $100K by Year-End
Bitcoin’s Rocky Road: Consolidation, Crash, and a $100K Forecast
The cryptocurrency market is currently navigating a complex landscape of frustration and cautious hope. After reaching an all-time high of $1,245,000, Bitcoin has entered a prolonged period of consolidation, repeatedly failing to break and sustain a position above the crucial $95,000 price level. This significant pullback from its peak has left many investors questioning the short-term viability of the bull run. Against this backdrop of uncertainty, one prominent voice offers a starkly contrasting, bullish perspective.
Tom Lee, CIO of Fundstrat and Chairman of Bitmine Immersion, stands firmly against the tide of doubt. In a recent interview with CNBC, Lee provided a strong and definitive prediction, stating, “Well, I think it’s still very likely that Bitcoin is going to be above $100,000 before year end.” His optimism is not based on mere speculation but is rooted in a specific interpretation of a recent, catastrophic market event and its subsequent cleansing effect on the ecosystem.
Tom Lee’s Bullish Conviction: Anchored in Broader Market Resilience
Lee’s confidence in Bitcoin’s trajectory is part of a broader, fundamentally optimistic outlook on the financial markets. The conversation with CNBC began with the analyst expressing strong confidence in next year’s corporate earnings. He specifically highlighted the S&P 500’s “resilience,” noting how the index had fully reversed its recent sharp declines. This perspective is crucial because it frames cryptocurrencies not as an isolated asset class but as one component of the global risk appetite spectrum.
However, Lee’s outlook is not without caution for traditional markets. He warned that some corrections may already be priced in and that a sudden monetary or policy shock could still trigger a significant 20% pullback. Yet, he characterized such a decline as likely temporary, with the market eventually recovering. This nuanced view—acknowledging potential short-term pain while maintaining a long-term bullish stance—directly informs his analysis of the crypto market’s recent turmoil.
‘Armageddon or Flash Event’: Dissecting the October 10th Liquidation
The core of Lee’s optimistic thesis hinges on his analysis of the dramatic event that shook the crypto world on October 10th. He described the shakeout as an “Armageddon” or “flash event,” marking a liquidation unprecedented in Bitcoin’s 15-year history.
According to Lee’s account, the crash was triggered by a specific catalyst: a pricing error, or “glitch,” that activated auto-liquidation mechanisms across various trading platforms. The consequences were severe. Nearly 2 million accounts were wiped out, and approximately one-third of market makers were forced out of business. This extreme event served as a brutal revelation of the excessive leverage that had previously driven Bitcoin above the $120,000 level. In essence, the market was purged of its most speculative and unstable positions in a single, violent episode.
A Cleansing Fire: How Deleveraging Sets the Stage for Recovery
Lee’s central argument is that this flash crash, while devastating in the moment, was a necessary cleansing for the market. He emphasized that the crypto market acts as a “very precise measurement of risk appetite.” The forced liquidation of over-leveraged positions means the system has undergone a massive deleveraging.
In his view, this process indicates that the market is approaching a bottom. The "weak hands" and over-extended leverage have been largely washed out, creating a more stable foundation from which a new leg up can begin. Lee draws a historical parallel to the 2022 market cycle, suggesting that the current recovery could be faster than the eight-week rebound observed during that period. Although he acknowledged that crypto is currently lagging behind sectors like AI, which are expected to lead future market gains, the structural cleanup provides a compelling case for a sharp reversal in Bitcoin's fortunes.
The Current Landscape: Technical Bearishness Meets Lingering Fear
Despite the long-term structural optimism from analysts like Lee, the current technical and sentiment picture remains decisively challenging. The extended correction has pushed Bitcoin below $95,000, a critical level that also involved breaching the 365-day Moving Average (DMA). Such technical breakdowns traditionally confirm that bears maintain control in the short term.
This bearish technical structure is reflected in market sentiment. At press time on November 28, 2025, the Crypto Fear and Greed Index stood firmly in the ‘Fear’ zone. This indicator confirms that the market remains deeply cautious and that significant time and positive price action are required to rebuild investor confidence. The disparity between Lee's fundamental outlook and the present technical reality defines the current tension in the market.
The Path Forward: Temporary Pain and the Fed Catalyst
Lee provides a specific explanation for Bitcoin’s ongoing weakness below $95,000. He attributes it to “sharks”—likely referring to large, influential traders or institutions—covering losses sustained during the October flash crash. He describes this selling pressure as "temporary pain" that should resolve by late November or early December.
The key catalyst for a sustained recovery, according to this narrative, now lies with traditional finance authorities. Lee posits that the Federal Reserve's decision on an interest rate cut at its December meeting will be a primary factor determining whether Bitcoin can mount a significant rebound. A dovish shift from the Fed could inject liquidity and bolster risk-on assets like Bitcoin, providing the macro-economic tailwind needed to validate his forecast.
Strategic Conclusion: A Market Coiled for Action
Bitcoin’s current period of muted volatility should not be mistaken for a “dull” market; rather, as Tom Lee’s analysis suggests, it is a market coiled. The unprecedented deleveraging from the October 10th flash crash has potentially cleared the speculative excess that was holding back sustainable growth.
The immediate future hinges on two critical factors: overcoming the technical resistance at $95,000 and receiving a favorable macroeconomic cue from the Federal Reserve. Sustained trading above the $95,000 resistance level would confirm a technical breakout from consolidation, directly validating Tom Lee’s $100,000+ forecast by year-end. Conversely, failure to reclaim this level risks a slow, discouraging drift lower, prolonging the period of fear and consolidation.
For investors and observers, the coming weeks are critical. Watch for two key signals: Bitcoin’s ability to decisively break above $95,000 on significant volume, and the Federal Reserve's policy announcement in December. These events will determine whether the path cleared by October's crash leads to the rally Tom Lee predicts or to further uncertainty.