Tom Lee "Crypto Pessimism Peaks, Signs of Rebound"

▲ Virtual asset trading

The stock and cryptocurrency markets have already passed an invisible downturn. Current pessimistic sentiment and short-selling positions indicate signs of a market bottom, not a peak.

According to crypto media outlet BeInCrypto on May 3 (local time), Fundstrat co-founder Tom Lee analyzed through a research channel that software stocks and cryptocurrencies have already experienced a deep decline. Lee explained that short-selling positions have soared to levels typically seen at the peak of past downturns. He also interpreted the divergence where investor sentiment became defensive while market indicators stabilized not as the start of a decline, but as a precursor to a rebound.

Lee's assessment is that the current financial pressure is merely a typical credit cycle, not a systemic collapse like in 2008. Lee diagnosed that the recent tightening in the private credit market is just part of the credit cycle, and large banks can thrive sufficiently within this cyclical structure. He added that historically, markets move in a direction that inflicts the most pain on investors.

Real Vision founder Raoul Pal also supported the optimistic view, defining the current situation as a mid-cycle adjustment rather than a market peak. Pal cited global money supply (M2) reaching an all-time high and a declining dollar value as key evidence. He also presented improved US Institute for Supply Management (ISM) index and an upward shift in the US liquidity environment as positive indicators.

The phenomenon of the Crypto Fear & Greed Index remaining below 10 for the longest period ever is interpreted as a signal of reversal, not trend continuation. Pal explained that artificial intelligence (AI) and tokenization technology are strengthening the structural value of blockchain. He analyzed that payment networks and on-chain settlement infrastructure, which AI agents will use on a large scale, will attract funds to Bitcoin (BTC) and Ethereum (ETH).

The future direction of the market depends on the speed of liquidity expansion and how quickly investor sentiment catches up with actual data. When macroeconomic pressures ease, asset prices are likely to rise sharply, closing the gap between indicators and sentiment. Experts are noting that the market's intrinsic data is already sending recovery signals and are calling for strategic responses.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*