‘Turnaround Tuesday’?: FundStrat’s Lee Says “All The Pieces Are In Place For Crypto To Be Bottoming”

Bitcoin remains under pressure this morning, stalling after a brief rebound from a 10-month low as trader caution persisted in options activity.

Trading was mostly flat, with the biggest cryptocurrency hovering below $78,500 a day after bearish sentiment nearly pushed it to the lowest level since President Trump returned to the White House just over a year ago.

The Bear Traps Report’s Larry McDonald laid out the following as some of the reasons for the relentless decline in Bitcoin?

1. We know that Oct 10 (Billions $$ lost overnight in crypto) was a pivotal moment when some glitches Binance triggered a sell-off, exacerbated by Trump’s tariff tweet that day (100% on China) and MSCI reviewing DAT company eligibility (MSTR, etc.).

2. Also during Q4, bitcoin suffered from market makers deleveraging, the government shutdown, and the liquidity drain (overnight funding stress), which forced the Fed to restart QE in Dec.

3. Late in Q4 Mt Gox started to sell again. They still have about 40K bitcoin that they periodically sell, but anytime they show up, it weighs on bitcoin.

4. The cold spell in mid-January forced a lot of bitcoin miners offline to preserve electricity. This led to a drop in the hash rate, which also put pressure on prices.

5. Also in January, it became clear that the CLARITY Act (pro bitcoin) was going to be delayed because Trump wants to prioritize housing affordability first. So all the pumpers trying to front-run legislation just got carted off the field. 

6. Simultaneously, bank excess reserves started to bleed lower again as Bessent filled up the TGA to prepare for big tax refunds in Q1 and the Fed was slow to expand its balance sheet in January.

7. More recently, the appointment of Warsh as Fed chair has triggered a plunge in precious metals on concerns of balance sheet contraction, and this selloff spilled over on bitcoin as well.

However, amid all that, CoinTelegraph reports that market and derivatives data suggests Bitcoin may find support around YTD lows…

1. Resilience in Bitcoin derivatives suggests that professional traders have refused to turn bearish despite the 40.8% price decline from the $126,220 all-time high reached in October 2025. Periods of excessive demand for bearish positions typically trigger an inversion in Bitcoin futures, meaning those contracts trade below spot market prices.

Bitcoin 2-month futures basis rate. Source: Laevitas.ch

The Bitcoin futures annualized premium (basis rate) stood at 3% on Monday, signaling weak demand for leveraged bullish positions. Under neutral conditions, the indicator usually ranges between 5% and 10% to compensate for the longer settlement period.

2. Even so, there are no signs of stress in BTC derivatives markets, as aggregate futures open interest remains healthy at $40 billion, down 10% over the past 30 days.

“The BTC options market is showing signs of stabilizing as extreme downside fear begins to mean-revert,” said Sean McNulty, APAC derivatives trading lead at FalconX.

“However, a weekly close below $75,000 would invalidate the current bounce higher, and potentially open a vacuum toward that $69,000 to $70,000 zone.”

3. Traders grew increasingly concerned after spot Bitcoin exchange-traded funds (ETFs) recorded $3.2 billion in net outflows since Jan. 16. Even so, the figure represents less than 3% of the products’ assets under management. Additionally, after 10 straight days of outflows, BTC ETFs saw a large $561mm inflow yesterday…

Bitcoin US-listed spot ETFs daily net flows, USD

“For crypto specifically, ETF flow stabilization is the key signal to monitor,” said Timothy Misir, head of research at digital asset analytics firm BRN.

4. Strategy (MSTR US) also fell victim to unfounded speculation after its shares traded below net asset value, fueling fears that the company would sell some of its Bitcoin.

Beyond the absence of covenants that would force liquidation below a specific Bitcoin price, Strategy announced $1.44 billion in cash reserves in December 2025 to cover dividend and interest obligations. MSTR announces earnings on Thursday, so that could be a trigger for better or worse.

Bitcoin’s price may remain under pressure as traders try to pinpoint the drivers behind the recent sell-off, but there are strong indications that the $75,000 support level may hold.

“Turnaround Tuesday seems to be in effect,” said Jeff Anderson, head of Asia at STS Digital.

“Markets got over their skis selling risk assets, and now that everyone has calmed down a bit, things rally off the lows.”

Fundstrat Global Advisors’ Tom Lee is sounding a cautious yet optimistic note for crypto investors, arguing that recent turbulence in Bitcoin and Ethereum may be temporary.

“Investors appear more selective, waiting for clearer signals on macro conditions, liquidity, and whether Bitcoin can sustainably hold above prior highs before adding exposure,” said Sean Rose at digital-asset data firm Glassnode about flows and investor appetite.

“A similar slowdown in accumulation momentum among public and private companies reinforces this pattern.”

Despite near-term headwinds, Lee sees signals that crypto may be bottoming. Fundstrat advisor Tom DeMark believes “time and price” alignment has been reached, with Bitcoin back above $78,000 and Ethereum nearing $2,300.

Today @Fundstrat‘s Tom Lee on @CNBC: “All the pieces are in place for crypto to be bottoming right now”

Access Tom Lee’s market views and outlook with a 30-day free trial of premium Fundstrat research: https://t.co/sX6DE4NjMP pic.twitter.com/XscZBQLxGb

— FS Insight (@fs_insight) February 2, 2026

“All the pieces are in place for crypto to be bottoming right now,” he said, contrasting price weakness with network activity, confirming what Goldman pointed out yesterday, that in contrast to the declining price performance, on-chain activity painted a different picture, especially for the Ethereum and Solana networks.