Tom Lee Warns Of Crypto Crisis, Cites Firm Issues

Bitcoin’s recent downward trend continued as it fell below $100,000, prompting a warning from analyst and Bitmine chairman Tom Lee.

Lee stated on X that one or two market-making firms have significant balance sheet issues. He indicated signs of weakness within the cryptocurrency market are tied to these firms’ financial instability.

“Sharks are starting to circle,” Lee wrote, suggesting they are poised to trigger a liquidation event or further Bitcoin price decline. He added that while the situation is short-term, it does not negate Wall Street’s construction of an Ethereum super-cycle.

Lee cautioned against using leverage during this period. He advised users to avoid being liquidated.

Responding to a follower’s question about the crisis’s duration, Lee anticipates it will resolve within 6-8 weeks following a major liquidation event on October 10th.

This October 10th liquidation event, considered one of the largest in crypto history, saw numerous cryptocurrencies reach their lowest levels and over $20 billion in leveraged positions liquidated within approximately 24 hours. Some experts claim the total liquidation amount exceeded $100 billion.

Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility.