According to reports from Fundstrat, Tom Lee is treating September's crash fear as a contrarian signal rather than a predictor of continued weakness. The analyst suggests that a market this braced for weakness could rally instead, carrying Bitcoin toward $150,000. Lee has not dropped his correction call but has moved it, pointing to the September 15 Federal Reserve meeting as the moment that decides direction. The fear has an evidence base, as across 10 US midterm election years since 1986, the average stock market low landed on September 2, following an average slide of 16.77% from the prior high. In a recent CNBC interview, Lee noted that September is always a weak month. Because of mounting concerns, the market might surprise us to the upside.
As reported by Fundstrat, Lee spent August expecting those worries to converge and cost equities roughly 10%. His base case now is that policymakers neither hike nor cut rates. "If the Fed doesn't cut, doesn't hike, which is our base case, I think actually the markets could rally very strongly," he added in a CNBC interview. Should the pullback slip into October, Lee thinks it could start above 8,000 on the S&P 500, with the low potentially landing near 7,300. The current hawkish environment adds complexity, with three Fed presidents voting for a rate hike in July and Chair Kevin Warsh prioritizing inflation concerns. There was a 69% chance of a rate hike as of the time of writing, which directly dents risk sentiment despite recent market rallies.
According to Fundstrat reports, Lee billed crypto as the best candidate to wildly explode if the bullish outlook holds, particularly highlighting $ETH as the asset with the most FOMO in Sept and into year-end. The macro, especially Fed rate hike fears, punctured the late August crypto market rally after Chair Kevin Warsh echoed a hawkish stance last week. For him, inflation remained sticky, and the underlying market conditions were not favoring a loose monetary policy. Bitcoin's current price level sits near $78,300, up only 0.3% over 24 hours and trading about 37% below its record from October 2025. Glassnode noted that BTC holds near $78,300 after rallying from $64k lows, with institutional inflows staying strong but rising leverage, tight volatility spreads, and softening retail activity pointing to a cautious, transitional market.
Before the Fed rate decision on September 15th, two scheduled labor reports will provide crucial market direction. On September 1st, the JOLTS Jobs Openings report will be released, followed by Non-Farm Payrolls (NFP) on September 4th. Traders will use these reports to gauge the next Fed rate move, with strong labor markets typically forcing the Fed to pause interest rates. Key inflation data (U.S. CPI) will also be released on September 11th, and unless data points to a strong labor market and easing inflation, the chance of a rate hike is likely. The 50-week MA (currently at $81K) remains the last stand for BTC bears, with decisively reclaiming it making the next leg of the uptrend possible. The upcoming macro data will determine whether the market surprises to the upside as Lee projects.
