Bitcoin is approaching a significant resistance level as supply on exchanges dwindles to multi-year lows. This situation sets the stage for potentially explosive price movements driven by increasing institutional demand. Meanwhile, Ethereum is nearing a crucial breakout point, with analysts predicting a crypto super-cycle fueled by rising adoption and liquidity.
Currently, Bitcoin is targeting a critical retest of the $91.8K resistance level, which it lost following the recent Federal Open Market Committee (FOMC) meeting that caused a broad market correction. Despite some concerns, the market structure is showing higher lows across shorter timeframes. This indicates that the overall upward trend remains intact. A successful reclaim of the $91.8K mark could shift momentum sharply to the upside. Conversely, if Bitcoin fails to break through this level or loses the $89.5K support, the market may slide further, potentially retesting the $80K region, where a double-bottom pattern could emerge.
Bitcoin’s Supply Squeeze and Market Dynamics
The supply squeeze for Bitcoin is intensifying as exchange reserves have fallen to some of the lowest levels in years. In 2021, deposits were at 88,000 BTC, and at the last all-time high, they reached 126,000 BTC. Currently, these numbers have dropped significantly, even with Bitcoin hovering near $80K. The decrease in available coins on exchanges is diminishing sell pressure, as more Bitcoin is being transferred into cold storage, exchange-traded funds (ETFs), and long-term custodians. This trend suggests that any increase in demand could face a thin order book, making sharp price increases more likely.
Ethereum is also experiencing significant movements. After being rejected at the $3,400 level, it has slipped towards the $3,000 to $3,100 support zone. A rebound from this area could lead to another strong upward movement, while a breakdown may pave the way toward $2,800. Despite the short-term weakness, Ethereum’s price remains bullish. Recently, it crossed the $4,000 mark, demonstrating notable resilience and outperforming many major assets.
Tom Lee’s Optimistic Outlook on Crypto
Fundstrat’s Tom Lee maintains a bullish stance on both Bitcoin and Ethereum, arguing that the markets are still underestimating the impact of liquidity and institutional adoption as we move towards 2026. “Investors are still early,” Lee stated, labeling crypto as “the best-performing asset of them all.” He predicts that there will be 1.1 billion active crypto wallets by the end of 2025, describing this growth as the fastest wealth expansion the world has witnessed.
“This will be the fastest wealth accumulation cycle in history,” he emphasized, highlighting the rapid scaling of adoption. Lee also noted that the crypto market is highly responsive to the business cycle. With the Institute for Supply Management (ISM) index expected to rise above 50 for the first time in over three years, historical patterns suggest this shift often triggers super-cycle rallies in Bitcoin and Ethereum.
Reiterating his long-term perspective, Lee asserted that the market may already be entering a Bitcoin “super-cycle,” driven by structural changes in liquidity and rising institutional demand. He pointed out that long-term investors typically refrain from selling during these phases, viewing volatility as an opportunity to accumulate more assets. For Ethereum, he mentioned that dips towards the $3,000 level present compelling long-term value, comparing them to temporary pullbacks in high-conviction stocks like Nvidia.
With liquidity conditions expected to improve significantly in 2026, Lee believes that major cryptocurrencies with strong fundamentals are poised for substantial growth. As the cryptocurrency market continues to evolve, staying informed about emerging trends will be crucial for investors and enthusiasts alike.
