Tom Lee Identifies Market Maker Imbalance as Cause of Bitcoin Decline
BitMine Chairman Tom Lee attributes the recent cryptocurrency downturn to imbalances in market makers' balance sheets, rather than diminishing adoption or long-term market weakness. Concurrently, U.S. Treasury Secretary Scott Bessent anticipates a U.S.–China rare earths agreement completion by Thanksgiving.
Lee Attributes Temporary Stress to Market Maker Imbalance
Lee suggests this imbalance could lead to forced liquidations and aggressive price drops, likening it to predators targeting vulnerable prey. In an interview, Lee predicted a potential 50% drop in Bitcoin, indicative of the current market structure's frailty. He notes that some traders might exploit this to force further liquidations.
Bitcoin's struggle to recover from key support level breaches and Ethereum's selling pressure are evident. Despite the turmoil, Lee maintains that the downturn is temporary, driven by structural issues rather than fundamental weaknesses.
Lee Cautions Against Leverage in Volatile Markets
Lee remains optimistic about Ethereum's long-term prospects, citing Wall Street's interest in an ETH supercycle. He underscores this with BitMine's recent Ethereum acquisitions. The trend of traditional finance integrating blockchain continues robustly. Lee advises against leverage in such a volatile environment, as liquidations primarily affect traders using borrowed funds.
He emphasizes avoiding unnecessary risks at present, suggesting a market recovery could commence within six to eight weeks, likely post-Thanksgiving.
Bessent Optimistic About U.S.-China Rare Earths Agreement
Amidst crypto market concerns, geopolitical dynamics are evolving. In a Fox News interview, Secretary Bessent expressed confidence in finalizing a U.S.-China rare earths agreement by Thanksgiving. The deal aims to eliminate tariffs and prevent restrictions on vital minerals used in defense and technology.
Bessent is optimistic about China's compliance, citing positive discussions between Presidents Trump and Xi. The agreement is expected to follow a framework that halts new tariffs on Chinese imports, with China easing licensing restrictions on rare earths.