"Crypto Optimist" Tom Lee Says "Crypto Winter May Already Be Over...Sentiment Shift Likely by April"

"After the final shakeout, a solid bottom can be established"
"Short-term weakness versus strong gold prices...not a structural bearish trend"

There is growing optimism on Wall Street that the prolonged downturn in the virtual asset market may soon enter its final phase. Analysts say the bearish trend that has continued for about five months since the peak in October last year is effectively nearing its end.

Lee Tom, co-founder of Fundstrat Global Advisors, is considered one of Wall Street's leading bulls.

Tom Lee, co-founder of Fundstrat Global Advisors and considered one of Wall Street's most prominent bulls, said in an interview with crypto-focused media outlet Decrypt on the 15th (local time), "Market sentiment is currently extremely depressed, and price reactions are muted," but added, "The point at which investors start capitulation selling usually coincides with the tail end of a cycle." He said the so-called "crypto winter" may already have ended, and predicted that, at the latest, a turnaround in sentiment could emerge by April.

Lee has recently mentioned the possibility of one more leg down in prices. He explained that a typical pattern could repeat, in which a temporary "undercut" below key support levels occurs before the market confirms a bottom. "After the final shakeout, a solid bottom can be established," he added.

"Crypto winter" refers to a prolonged phase marked by sharp price declines, subdued trading, and a cooling of investor enthusiasm. After the bull markets in 2013 and 2017, similar correction periods followed, accompanied by drops of more than 70%. Lee's comments are being interpreted to mean that the current cycle may also be repeating this historical pattern.

Bitcoin and Ethereum, the leading cryptocurrencies, have been moving sideways within a trading range for the past several months without a clear direction. Some technical analysts believe that shrinking volatility and declining trading volumes may be signals that precede a major trend reversal. On-chain indicators also show that, in contrast to the exit of short-term traders, long-term holdings have remained relatively stable.

Lee also expressed confidence in the long-term value of Bitcoin. Comparing it with gold, he said, "For most of the period since its launch, Bitcoin has delivered returns that outpaced inflation," emphasizing its potential as a store of value. He argued that its recent short-term weakness, contrasted with the strength in gold prices, does not imply a structural bearish trend.

He further suggested that the macro environment could also turn more favorable for risk assets. If a shift in monetary policy stance and an improvement in liquidity conditions materialize, both the stock market and the virtual asset market could secure momentum for a rebound. However, he added that uncertainties surrounding geopolitical risks and the interest rate path remain, so the possibility of heightened short-term volatility must be kept in mind.