Bitcoin Could Rally to $150,000 as Market Braces for Weakness

Tom Lee, co-founder of Fundstrats and a well-known Bitcoin bull, is looking for a contrarian signal in the September crash fear. He believes that if the market is bracing itself for weakness, it could actually rally instead, pushing Bitcoin toward $150,000.

The basis for this view lies in historical data, which shows that across 10 US midterm election years since 1986, the average stock market low landed on September 2. These lows followed an average slide of 16.77% from the prior high.

This year's situation is complicated by a hawkish twist, with three Fed presidents voting for a rate hike in July and Chair Kevin Warsh prioritizing inflation in his Jackson Hole speech. Six-month PCE inflation was running at 4.1%, while bonds indicate that the effective fed funds rate near 3.63% is being matched by the 30-year Treasury yield above 5%.

Lee still expects some kind of correction, but now thinks it will be relatively mild and followed by a strong rally. He points to the September 15 Federal Reserve meeting as a key moment that could decide direction.