Tom Lee predicts Bitcoin will break $100,000 by the end of 2025: Only "short squeeze" is expected

As 2025 approaches its end, Wall Street analyst Tom Lee once again issues a bullish forecast, believing that Bitcoin’s price still has the potential to break through the $100,000 mark before the year’s end. However, the current market faces two major substantial resistances: the Chaikin Money Flow indicator, which tracks large capital movements, remains negative, indicating ongoing institutional capital outflows; at the same time, the daily average sell-off volume of long-term Bitcoin holders has surged 185% over the past month, soaring from about 97,800 BTC per day to nearly 279,000 BTC, creating persistent selling pressure.

Analysis indicates that in the absence of new capital inflows, the only realistic path to push Bitcoin past $100,000 is to trigger a massive short squeeze. This requires the price to first break through a key resistance zone near $97,200, thereby igniting a $3.41 billion short liquidation. The success or failure of this prediction no longer depends on fundamental narratives but is purely a game of longs and shorts in the derivatives market.

Tom Lee’s Year-End Bet: When Optimistic Predictions Meet Cold Data

As 2025 enters its final weeks, the cryptocurrency market seems to be caught in a weary sideways consolidation. After months of high-level oscillation, Bitcoin’s momentum has noticeably weakened, disappointing many investors hoping for a “Christmas rally” at year’s end. Against this cautious market backdrop, Tom Lee, co-founder of Fundstrat Global Advisors, re-emerges into the spotlight. In an interview with CNBC, he reiterated a rather bold view: Bitcoin still has the potential to reach or even surpass the psychological threshold of $100,000 before the clock strikes midnight on December 31.

Tom Lee is no stranger to the crypto space, and his past predictions have made him a notable voice in the market. However, the timing of this forecast is particularly delicate. On the surface, the market shows no signs of an imminent new bull run. Instead, a series of on-chain and derivatives data point in the opposite direction—markets are shrouded in weak funding and strong internal selling pressure. Lee’s prediction seems more like a bold extrapolation based on specific market structures amid a generally conservative sentiment. It’s not about spot ETF inflows or macro policy shifts, but rather about the extremely distorted positioning in the derivatives market and the potential for a “mechanical” rally that doesn’t rely on new buying.

Understanding this forecast hinges on recognizing that in highly financialized crypto markets, short-term price movements are often dominated by leverage and sentiment rather than pure supply and demand. When market structures become extremely unbalanced—such as excessive short leverage—an upward technical breakout can trigger a chain reaction, rapidly pushing prices higher. Tom Lee is betting on this possibility. His prediction is less about intrinsic value and more about a precise wager on the fragile structure of current derivatives markets. As year-end approaches, the moment of this high-stakes gamble draws near, with its success entirely dependent on whether key price levels can be effectively breached.

Double Headwinds: Capital Outflows and “Diamond Hands” Selling Suppressing the Rally

To understand the challenges facing Tom Lee’s prediction, one must first examine the two substantial headwinds currently confronting the market. These are: external capital hesitations and internal steadfast holders’ wavering, jointly forming formidable barriers to Bitcoin’s upward movement.

The first headwind directly concerns market liquidity—capital flow. Using the Chaikin Money Flow indicator, which tracks large fund inflows and outflows, we see clear signs of institutional caution. From December 17 to December 23, the indicator shows a worrying divergence: Bitcoin’s price experienced slight gains, but the CMF trend remained downward. This “price rises on declining volume” pattern is typically bearish, indicating that large players are reducing risk exposure during price stabilization rather than increasing their positions. Although the indicator rebounded about 68% after a sharp drop on December 21, it never returned above zero, confirming persistent net capital outflows. In short, the market needs genuine capital to push higher, but currently, large off-chain funds seem to be on the sidelines or quietly withdrawing.

If capital outflows weaken upward momentum, the second headwind directly erodes the market’s foundational holdings from within. Long-term holders—often called “diamond hands” by the community—are addresses that have held Bitcoin for over 155 days. Historical data shows that such investors tend to start large-scale selling near market cycle tops. Their behavior is a key indicator of the market’s stage.

Long-term holder selling pressure key data

• Initial sell volume (Nov 23): approximately 97,800 BTC per day
• Current sell volume (Dec 23): nearly 279,000 BTC per day
• Sell-off increase: 185%
• Behavior interpretation: Net holdings of long-term holders continue to decline, with sell-off speed sharply accelerating, indicating that the most steadfast group is taking profits or rebalancing assets on a large scale.

The daily sell volume surging 185% within a month is a strong signal that cannot be ignored. It suggests that the most stable and patient investors are shifting their chips to short-term traders or new entrants. This change in holding structure often accompanies increased volatility and upward selling pressure. When “smart money” exits and new capital cannot step in, any attempt at price appreciation faces heavy selling resistance. These two headwinds—weak external funding and surging internal sell-offs—combine to make sustainable upward movement driven solely by natural market buying extremely difficult. This is also the fundamental reason why markets are generally skeptical of Tom Lee’s optimistic prediction.

The Only Glimmer: How a Potential Short Squeeze Could Ignite Bitcoin’s “Liquidation Rally”

Despite facing these dual headwinds, markets are never short of surprises. The prediction by Tom Lee relies not on traditional fundamentals but on a market-specific price phenomenon in derivatives trading—short squeeze, or “liquidation rally.” This path does not require the Federal Reserve to pivot, ETF net inflows to surge, or long-term holders to cease selling. It only requires that the mountain of short leverage positions in the market be proven wrong.

The current structure of Bitcoin’s derivatives market sets the stage for a potential short squeeze. Examining the 30-day liquidation heatmap across major exchanges reveals a significant imbalance: the total short leverage liquidation volume is about $3.41 billion, while long leverage liquidations are around $2.14 billion. This means over 60% of leveraged positions are betting on prices not rising. Such extreme skewness makes the market highly fragile. Once prices start moving upward, these short positions face margin calls or forced liquidations. The act of liquidating shorts itself sends buy orders into the market, creating a positive feedback loop of “buying triggers more buying.”

This process can be simply understood as: when the price rises enough to trigger the first short position’s forced liquidation, an automatic buy order is executed to close that position. This buy order further pushes the price higher, triggering the next higher-level short liquidations, and so on—potentially causing a cascade. During rapid rallies in early 2023 and mid-2024, such liquidation-driven “mechanical” rallies were observed. Theoretically, Bitcoin can “go up without new buyers,” solely by forcing existing shorts to capitulate, creating a significant upward move. Tom Lee’s predicted push toward $100,000 hinges on this mechanism. The dense distribution of short positions acts like a series of accelerants along the upward path, waiting for a spark to ignite.

Key Price Levels: Breaking $97,200 to See the Dawn of $100,000

So, where is this “spark” exactly? The market is not randomly fluctuating; the initiation of a short squeeze requires the price to precisely break through certain critical technical and liquidation thresholds. For traders, understanding these levels is more practical than debating whether Tom Lee is correct.

The first hurdle is near $91,200. This is an initial resistance zone. If Bitcoin can achieve an effective daily close above this level, it will begin to clear out short positions with lower leverage and tighter stop-losses. While this may not trigger a massive wave, it can improve the short-term technical outlook, attract trend traders, and build momentum toward more significant resistance levels.

However, the real “battlefield” is at $97,200. Since mid-November 2025, this level has repeatedly suppressed Bitcoin’s upward attempts, forming a solid technical barrier. More importantly, according to liquidation heatmap data, this zone is the most concentrated “powder keg” of short leverage. If Bitcoin’s price can break through $97,200 with strong volume, it would expose about $3.41 billion worth of short leverage to losses. This could trigger a large-scale chain reaction of short liquidations. In such a scenario, forced buy-ins driven by liquidations could propel the price rapidly toward the next psychological target at $103,800.

Conversely, if Bitcoin cannot effectively reclaim $91,200 and continues to fluctuate or decline within the current range (e.g., $88,000 to $91,000), the two headwinds mentioned earlier will regain dominance. Weak funding and persistent long-term selling will gradually erode market patience, potentially shifting the positioning structure in favor of bears. In this case, a liquidation rally becomes unlikely, and Tom Lee’s year-end prediction of $100,000 will lose its feasible path. Therefore, market participants should focus less on the prediction itself and more on the price action around these two critical levels—$91,200 and $97,200. The market has placed itself at a crossroads: either break upward to liquidate shorts and achieve a quick surge, or consolidate downward to digest and wait for new catalysts. Tom Lee’s bet hinges precisely on this narrow margin.