Forecasting a challenging period ahead, Wall Street veteran Tom Lee of Fundstrat warns that 2026 could mirror the tumultuous markets of 2025, signaling a potentially "painful" start. This cautious outlook is underpinned by several critical factors, ranging from escalating tariffs to shifts within the Federal Reserve, all poised to shape the investment landscape.
The Looming Macro Headwinds for 2026
Lee emphasizes that tariff escalations and the Federal Reserve's autonomy, particularly the potential appointment of a new Fed chair, are primary drivers for this anticipated volatility. He notes that markets historically "test" a new Fed leader, creating a period of potential correction. This echoes the experience of 2025, where tariff-related jitters initially dragged Bitcoin's price down significantly before a recovery emerged later in the year after key trade agreements were finalized, illustrating the profound impact of such macro events.
Bitcoin's Current Struggles and Future Scenarios
Currently, Bitcoin finds itself in a precarious position, barely clinging to the $90k mark amid renewed tariff concerns, down from a recent high of $98k. Analytical firm Swissblock highlights that broader macro risks, such as Japan's bond market crisis, are contributing to BTC's constrained price range. Their proprietary Bitcoin Risk Index has surged, nearing the "High Risk" zone, indicating a phase of consolidation that began in November. While a short-term hold above current support could see pushes towards $94.8k and potentially $99k, a failure to maintain $89.2k could lead to further declines towards $84.5k.
Institutional Demand and ETF Influence
A significant factor influencing Bitcoin's recent trajectory is the cooling institutional demand observed through U.S. Spot BTC ETFs. These investment vehicles have shown a close correlation with Bitcoin's price movements. After being net sellers in late 2025, ETFs became net buyers in early January 2026, which helped propel BTC to $98k. However, these institutional flows have since plateaued near neutral levels, reflecting a pause in the recovery as market participants assess the complex interplay of macroeconomic developments and geopolitical tensions.
