Fundstrat Warns Clients of Possible Crypto Drawdown in Early 2026
Fundstrat Global Advisors just fired a warning flare across the crypto market's bow. Their latest client note points to a potential drawdown phase kicking off in early 2026—a forecast that's got traders scrambling to check their risk models.
The Countdown to a Correction
Forget vague predictions. The firm's analysis pins the turbulence to a specific window: the first half of 2026. It's a classic case of market mechanics—cycles of euphoria often need a breather, and the math suggests one is coming. The warning isn't about a crash, but a healthy, necessary cooldown after a sustained run.
Why the Timing Adds Up
History doesn't repeat, but it often rhymes. Market strategists are looking at past performance patterns, liquidity cycles, and macroeconomic catalysts lining up for that period. It's the kind of forward-looking risk management that separates diamond hands from bag holders—a reminder that in crypto, timing is everything, except when it's not. After all, what's finance without a few confidently delivered predictions that may or may not age like milk?
Navigating the Next Phase
So, what's the play? Fundstrat's note pushes for strategic positioning over panic. It means reviewing portfolio allocations, stress-testing exit strategies, and maybe—just maybe—keeping some dry powder for the discounts that volatility brings. The smart money isn't running for the hills; it's mapping the terrain.
The message is clear: the bull run isn't doomed, but no market goes up in a straight line. Early 2026 could be where the road gets bumpy. Whether you see it as a threat or an opportunity depends entirely on your preparation today.
Bitcoin to fall between $60K and $65K alongside ETH’s $1.8K and $2K
According to Lee, pro-business regulations, especially those linked to AI, the upcoming mid-term elections, and the new Fed leadership, may prove to be suitable for the market. He added that the market will come back in force, but it will take at least the first half of 2026 to get back. Lee predicted that the first half may go down by 10 to 15% before recovery.
Fundstrat has not publicly confirmed the document, which is labelled for exclusive client use under the ‘Crypto – Strategy’ category. The document is attributed to Sean Farrell, the firm’s head of digital asset strategy. However, multiple crypto-focused accounts claim the document was distributed through internal clients.
Despite the short-term bearish predictions, Fundsrat’s long-term sentiment remains bullish, with the short-term pullback expected to create buying opportunities ahead of recovery in the second half of 2026.
Lee spoke at Binance Blockchain Week in Dubai early this month, noting that ETH is ‘grossly undervalued’. He positioned the network at the center of a structural shift driven by real-world asset (RWAs) tokenization across stocks, bonds, real estate, and financial products on smart contract platforms.
Lee says Ethereum is having its ‘1971 moment’
Tom Lee described Ethereum’s 2025 performance as its ‘1971 moment’. According to Lee, after five years of range-bound trading, the ethereum token began to break out, which prompted increased ETH exposure at Fundstrat.
Lee forecasted that ETH may reach $12,000 based on an eight-year average ratio to Bitcoin, or roughly $60,000 to $62,000 upon reaching a 0.25 ratio or 2021 relative levels. Lee has also projected before that bitcoin will hit $250,000 within months, forming new all-time highs as early as January 2026, alongside ETH targeting $5,500 to $15,000 by the end of 2025.
Elsewhere, ARK Invest recently organized a podcast with Tom Lee, discussing BitMine’s rise to the top as a corporate Ethereum holder. Lee noted that this year is Ethereum’s ‘ChatGPT moment’ via tokenization and stablecoins, and he views ETH surpassing Bitcoin in market cap, becoming the base layer of Wall Street finance.
BitMine Immersion Technologies, which is linked to Lee, has accumulated roughly 3.9 million ETH valued at $11.81 billion, marking it as the first public treasury firm. BitMine’s holdings represent approximately 3.28% of the total ETH supply.
At the time of publication, ETH was trading at $2,985, representing a 4.3% drop over the past week. The price marks a roughly 42% decline from its ATH recorded in August. BTC was down 2.3% over the past week, trading at $88,232 at the time of publication.
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