Tom Lee’s Aspirational Bitcoin Price Prediction: Navigating Current Challenges

Tom Lee recently predicted that Bitcoin could surge above $100,000 before the end of 2025. This forecast is ambitious, particularly as Bitcoin currently trades sideways and shows signs of fatigue in momentum. At first glance, the market seems unprepared, with significant capital inflows decreasing, long-term holders selling off, and compressed price action.

Key Takeaways

Tom Lee predicts Bitcoin could surpass $100,000 by the end of 2025, though market conditions are challenging.
Major capital flows are weakening, while long-term holders are increasingly selling off.
A potential path to meet Lee’s prediction relies on a short squeeze triggered by price movements above key thresholds.
Key levels to watch include $91,220 and $97,820, which determine the likelihood of achieving significant price increases.

Nevertheless, there is a potential path that could still allow Lee’s prediction to materialize. This path does not depend on new purchases but rather on market positioning.

Challenges from Major Investors and Long-Term Holders

The first issue facing Tom Lee's prediction, discussed on CNBC, is related to capital flows.
TOM LEE: "I still believe it's highly probable Bitcoin will exceed $100,000 before the year concludes—and perhaps even reach a new all-time high."

"Historically, Bitcoin tends to make significant moves within just ten days each year." 😲 pic.twitter.com/BuL0JgwcF3 — Fiat Archive (@fiatarchive)

The Chaikin Money Flow (CMF), which measures whether significant capital is entering or exiting the market, currently exhibits weakness. Between December 17 and December 23, Bitcoin’s price saw a slight increase, but the CMF moved downward—a bearish indicator. This suggests that larger investors are reducing their market exposure, despite the price holding steady.

CMF levels also drastically fell after December 21, dropping more than 200%, before rebounding slightly around 68%. Although this rebound appears positive, the CMF remains below zero, indicating continued weak capital inflows.

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Increased Selling from Long-Term Holders

The second obstacle is related to long-term holders—wallets known for selling late, rather than early.

Over the past month, long-term holder net position changes have remained substantially negative. On November 23, long-term holders sold approximately 97,800 BTC daily. By December 23, that number had surged to nearly 279,000 BTC sold in just one day, representing a staggering 185% increase.

This large-scale distribution from committed holders complicates the outlook for sustained price increases when both major capital flows and long-term holders are unfavorable.

A Possible Path for Bitcoin to Reach $100,000

Despite these challenges, Bitcoin still has avenues to explore. However, this route relies on an unexpected factor.

The market is currently heavily tilted towards short positions. Analyzing the 30-day liquidation map reveals that cumulative short liquidation leverage is around $3.41 billion, while long liquidation leverage is closer to $2.14 billion. This significant imbalance indicates that over 60% of leveraged positions are against a price rise.

This scenario is important because, even in weak buying conditions, Bitcoin's price can still rise through forced liquidations, similar to past movements. Essentially, Bitcoin does not require new buyers; it merely needs to outmaneuver short positions.

Trigger Points for a Price Surge

To initiate a short squeeze, Bitcoin must breach certain price levels.

The initial zone to watch is around $91,220. A sustained move above this threshold could start liquidating lower-leverage short positions, thereby enhancing short-term momentum.

The key trigger point lies around $97,820. This level has previously restricted the price on numerous occasions since mid-November and corresponds with the densest cluster of short liquidations. Breaking through this level could jeopardize a large portion of the $3.41 billion short leverage.

If a cascade effect occurs, Bitcoin could rapidly approach the psychological level of $100,380 without solid capital inflows or support from long-term holders. However, the invalidation point remains clear.

Conclusion: What Lies Ahead for Bitcoin

If Bitcoin fails to reclaim the $91,220 mark and continues its sideways movement, the CMF's weakness and the selling pressure from long-term holders will dominate. In this scenario, the anticipated short squeeze would not materialize, leaving Tom Lee’s price target out of reach. Currently, Bitcoin finds itself between the selling pressure from long-term holders and strategic positioning in the long and short markets.

The outcome hinges entirely on whether shorts are compelled to cover their positions.