Tom Lee Analyzes Post-Liquidation Cryptocurrency Market Challenges

3 mins mins

Key Points:

Tom Lee analyzes post-liquidation impact on cryptocurrency market dynamics.
Focus on market maker balance sheets and liquidity.
Identifies potential recovery timelines for crypto assets.

Tom Lee, co-founder of Fundstrat, reported November 17 that recent market weakness, post-October 10th crypto liquidation event, suggests market makers’ impaired balance sheets contribute to suppressed prices.

This situation indicates potential market liquidity challenges, implying a possible delay in price recovery, with broader implications for cryptocurrency and stocks in the coming weeks.

October Liquidation Impact and Market Weakness

The largest single-day deleveraging event on October 10th significantly impacted cryptocurrency trading volumes. Tom Lee, a prominent analyst, suggests the current market struggles stem from impaired market maker balance sheets. “The continued weakness post-liquidation suggests market makers’ balance sheets may be impaired, forcing them to raise funds and reduce liquidity.” This tightening effect is akin to past liquidity events, with firms raising funds and reducing market operations. As a result, cryptocurrency prices remain suppressed, reflecting constraints also observed in 2022. Lee projects that these conditions may last 6 to 8 weeks.

In response to these circumstances, Lee maintains optimism for the long-term potential of prominent cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH). He asserts that price peaks in this cycle may be 12 to 36 months away, diverging from historical patterns. Tom Lee, Fundstrat, adds, “Despite current weakness, the top for this crypto cycle is likely ’12 to 36 months away,’ suggesting patience amid short-term volatility.” He emphasizes ongoing asset accumulation despite current difficulties.

Did you know? Despite historical downturns post-liquidation events, 2022 saw a significant price recovery after 8 weeks, suggesting eventual resilience.

Bitcoin and Ethereum’s Long-term Potential Outlook

Did you know? Despite historical downturns post-liquidation events, 2022 saw a significant price recovery after 8 weeks, suggesting eventual resilience.

According to CoinMarketCap, Bitcoin’s current price is $95,791.88 with a market cap of formatNumber(1910934181321.14, 2). It maintains a market dominance of 59.44%, yet its 24-hour trading volume declined by 61.46%. The cryptocurrency’s price has decreased by 9.45% over the past 7 days, reflecting a broader trend of market adjustments.

bitcoin-daily-chart-4441 — Bitcoin(BTC), daily chart, screenshot on CoinMarketCap at 14:38 UTC on November 17, 2025. *Source: CoinMarketCap*

Analysts at Coincu emphasize that the post-liquidation market correction is testing long-term investor resilience. Historical trends indicate possible recovery scenarios, contingent on restored liquidity dynamics. The interplay between regulatory shifts and technological advancements could shape future recovery pathways.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.