Tom Lee just said the price will rise to 250K, then immediately warned that there will be a bear market moment in 2026.

Wall Street renowned analyst Tom Lee released a seemingly contradictory signal during a CNBC interview today: while optimistic about the overall market in 2026, he warned that there could be a moment mid-year that feels like “entering a bear market.” The logic behind this view warrants careful analysis.

A Broad Rally at the Start of the Year Is Indeed a Good Sign

Tom Lee first affirmed the market’s performance at the start of the year. According to the latest data, 2026 has indeed begun with a broad rally—stocks, precious metals, and cryptocurrencies all advancing together. As of January 6, the total market capitalization of cryptocurrencies has surpassed $3.21 trillion, with a 24-hour trading volume of $123.86 billion. Bitcoin remains stable around $93,800.

This broad market breadth is seen by Tom Lee as a positive signal. In his words, it indicates a solid market foundation for both investors and institutional players, rather than a rally driven by a few assets alone.

The “Three-Act Play” Expectation for 2026

Tom Lee describes this year as one of “joy, depression, and rally,” a pattern similar to 2025’s performance. More specifically:

Act One: Joy (ongoing)

The broad rally at the start of the year is this act. Market sentiment is optimistic, institutional funds continue to flow in, and this momentum may persist into the first half of the year.

Act Two: Depression (expected to occur mid-year)

Tom Lee explicitly states that at some point this year, it will feel like entering a bear market. He believes this turning point may be related to the market’s “test” of the new Federal Reserve Chair, with a possible 15% to 20% correction, especially in the second half of the year.

Act Three: Rally (to be achieved before year-end)

The key point is that Tom Lee emphasizes this is not the end of the cycle but a buying opportunity. He predicts the S&P 500 could reach 7,700 points by the end of 2026, ending on a bullish note.

Comparison with Other Institutional Forecasts

Tom Lee’s view is not isolated. According to recent information, several mainstream institutions are also optimistic about 2026:

Interestingly, Tom Lee’s predictions for Bitcoin are aggressive, and his outlook for Ethereum is even more so—recently he mentioned ETH could organically reach $250,000. This bold forecast reflects his confidence in the long-term position of crypto assets.

Realistic Assessment of Risks and Opportunities

Tom Lee’s “depression” warning deserves serious attention. The 15-20% correction he mentions is not extreme, but for investors accustomed to the sharp rise in 2025, it could be psychologically impactful. Possible triggers for this correction include:

• Market testing of the new Fed Chair’s policy stance
• Changes in macroeconomic data (e.g., ISM index trends)
• Geopolitical risks
• Shifts in institutional fund flows

From another perspective, this “depression” phase is precisely the “buying opportunity” he emphasizes. Historically, every market correction has been a good time to accumulate positions, especially when fundamentals remain strong.

Connecting Current Market Conditions with Expectations

The current market performance aligns with Tom Lee’s framework. The early-year strong rebound (BTC +0.96%, ETH +1.29%, total market cap +1.49%) demonstrates good breadth. Ongoing institutional inflows, signals like US banks allowing financial advisors to allocate to Bitcoin ETFs, all support this optimistic outlook.

However, it’s important to note that market liquidity remains relatively low, so the sustainability of this rebound needs to be monitored.

Summary

Tom Lee’s 2026 forecast essentially presents a “volatile upward trend.” He is neither blindly bullish nor bearish but recognizes that the market will experience significant fluctuations while maintaining an overall bullish outlook. The value of this perspective lies in:

1. Psychological preparation: Be ready for a 15-20% correction mid-year so that when it happens, you won’t panic.
2. Opportunity recognition: View corrections as buying opportunities rather than exit signals.
3. Time frame: The cycle is overall bullish, but patience is required; it’s not a straight line upward.

For crypto market participants, the key is understanding this logic rather than blindly predicting specific numbers. Market volatility is normal; learning to stay rational amid fluctuations is true investment wisdom.