Is a mechanical glitch or software bug to blame for Bitcoin's falling? | Source: Image created with Gemini
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Key Takeaways
Tom Lee has attributed Bitcoin’s steep decline to a “mechanical glitch”.
He also publicly backed investor Mike Alfred’s accusation that higher entities are intentionally pushing Bitcoin lower.
Some analysts are expecting Bitcoin to fall toward $80,562.
Bitmine chairman and well-known strategist Tom Lee has claimed that a “mechanical glitch” has played a central role in Bitcoin’s accelerating price drop, while also agreeing that deliberate market pressure may be pushing prices lower.
The comments come as Bitcoin fell close to $83,000 on Friday, its lowest price since April, with analysts warning that a bear market has firmly taken hold.
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Speaking on CNBC’s Power Lunch on Thursday, Lee linked the downturn to a technical failure in an exchange’s stablecoin pricing feed during the Oct. 10 crash, which triggered a wave of automatic liquidations.
“On a specific exchange, a stablecoin’s price varied from other exchanges… it dropped to $0.65. But that only happened within this exchange because of liquidity.
“It wiped out, as that spread across other exchanges, because liquidations cascade.
“Almost two million crypto accounts got wiped out, even though minutes before they were actually profitable accounts.”
Lee described the core issue as an automation flaw tied to ADL (Auto-Deleveraging Liquidation), a mechanism he compared to a margin call.
“This error is actually essentially a bug, a code error… in retrospect, they would have pulled pricing from across exchanges rather than rely on internal quotes,” he added.
When asked who was affected and where the bug originated, Lee declined to identify any market-making firms.
“I am aware of names, but… I’m not someone who wants to name names,” he said.
Lee compared the malfunction to historical structural failures:
“In 1987, portfolio insurance was the quote glitch and that triggered the cascade… in 2009, it was really the collateral wasn’t secure in real estate… in crypto, this code of ADL and the way they pull prices, never going to happen again.”
He said the crypto market has been “limping along since Oct. 10,” describing the current situation as an echo of that event.
Who Was Lee Talking About?
While Lee refused to mention any names when discussing the technical glitch, many of the signs point to the malfunction which unfolded with Binance.
On Oct. 10-11, screenshots showing USDe, a “synthetic dollar” created by Ethena Labs, dropping to $0.65 on Binance spread across social media, creating fears of a catastrophic depeg.
On Oct. 11, $USDe depegged to $0.65 against USDT. | Source: @PeckShieldAlert on X.
Because Binance’s internal oracle treated the faulty $0.65 price as “real,” it triggered forced liquidations for traders holding USDe-backed positions.
Following the incident, Binance began refunding users who were wrongly liquidated after it was exposed.
Lee Backs Deliberate Market Manipulation Claims
Alongside the structural issues, Lee agreed with claims that powerful players are intentionally driving Bitcoin lower, accelerating the rapid price drop.
Mike Alfred, a well-known Bitcoin bull, wrote on X that a mysterious force was: “pulling out all the stops to try to manipulate Bitcoin lower using perps and futures and other derivatives.”
“They are working overtime to try to scare people out of their corn. Do not fall for it. They are running one of the biggest scams I’ve ever seen in markets, period,” he added.
— Thomas (Tom) Lee (not drummer) FSInsight.com (@fundstrat) November 20, 2025
Lee responded: “Agree.”
The remarks drew backlash from critics online, with some traders accusing the pair of “denial” and promoting “conspiracies.”
One user wrote:“Man I like good conspiracies but this one feels forced. Every time Bitcoin dips people start yelling manipulation like clockwork.”
“Maybe price is dropping because too many folks aped in at the top and now they are unwinding. Not everything needs a villain.”
Another user added: “It’s only manipulated when it goes down right?”
Bitcoin’s Bearish Price Drop
Crypto analyst Valdrin Tahiri said Bitcoin’s decline now resembles the start of a sustained bearish cycle.
On Friday, Bitcoin fell to $83,324, a drop of more than 35% from its all-time high and its lowest level since April 21.
“The severity of the crash, combined with the lack of bullish trend reversal signs, is triggering major fears that the bull market has already ended,” Tahiri said.
Technical indicators point to a bearish outlook:
RSI at 24, deep in oversold territory
MACD well into negative territory, with no bullish divergences
Wave count analysis suggesting further declines, with an extended third wave possibly targeting $80,562
“Wave three could have 1.61 times the length of wave one… there could be a minor bounce soon, but the price of Bitcoin will eventually crash lower,” Tahiri added.
Kurt Robson is a London-based reporter at CCN, specialising in the fast-moving worlds of crypto and emerging technology. He began his career covering local news in Cornwall after graduating from Falmouth University with First Class Honours in Journalism. There, he cut his teeth on everything from council meetings to missing swans.
He quickly rose through the ranks to become a frontline journalist at several of the UK’s leading national newspapers. Over the years, he has interviewed musicians and celebrities, reported from courtrooms and crime scenes, and secured multiple front-page exclusives.
Following the upheaval of the COVID-19 pandemic, Kurt shifted his focus to technology journalism—just ahead of the AI boom. With a natural curiosity and a trained eye for emerging trends, he has found a new rhythm in reporting on innovation.
At CCN, Kurt's work focuses on the cutting edge of crypto, blockchain, AI, and the evolving digital world. Drawing on his background in people-first reporting and his deep interest in disruptive tech, Kurt delivers stories that are insightful, entertaining, and human-centric.
