Tiger Research: Policy Catalysis and Liquidity Expansion, Bitcoin Q1 2026 Valuation Locked at $185,500

This report is authored by Tiger Research, presenting our market outlook for Bitcoin in Q1 2026, with a target price set at $185,500.

Key Points

• Macro stability, momentum slowing down: The Federal Reserve’s rate cut cycle remains on track with M2 money supply growth. Nevertheless, the $4.57 billion ETF outflows have impacted short-term momentum. The advancement of the CLARITY Act could be a key factor in attracting large banks into the market.
• On-chain indicators turning neutral: Buying demand around $84,000 has formed a solid bottom support; while $98,000, representing short-term holders’ cost basis, currently acts as a major resistance level. Key indicators like MVRV-Z show the market is at fair value.
• Target price $185,500, maintaining bullish outlook: Based on a baseline valuation of $145,000 and a +25% macro factor adjustment, we set the target price at $185,500. This implies approximately 100% upside potential from current levels.

Macro easing persists, growth momentum wanes

Bitcoin is currently trading near $96,000. Since our previous report published on October 23, 2025, the price has declined by 12%. Despite recent corrections, the macro environment supporting Bitcoin remains solid.

The Fed maintains dovish stance

Source: Tiger Research

The Federal Reserve has cut interest rates three consecutive times from September to December 2025, totaling a 75 basis point reduction, with current rates in the 3.50%–3.75% range. The December dot plot projects the rate will fall to 3.4% by the end of 2026. While a 50 basis point or larger single rate cut this year is unlikely, with Powell’s term ending in May, the Trump administration may appoint a more dovish successor, ensuring the continuation of monetary easing.

Institutional outflows and corporate continued buying

Despite a favorable macro environment, institutional demand has recently been subdued. Spot ETF funds saw outflows of $4.57 billion in November and December, the largest since product launch. The annual net inflow was $21.4 billion, down 39% from last year’s $35.2 billion. Although asset rebalancing in January brought some inflows, the sustainability of the rebound remains uncertain. Meanwhile, companies like MicroStrategy (holding 673,783 BTC, about 3.2% of total supply), Metaplanet, and Mara continue to increase their holdings.

The CLARITY Act as a policy catalyst

Amidst stagnating institutional demand, regulatory progress is becoming a potential driver. The House-passed CLARITY Act clarifies jurisdictional boundaries between the SEC and CFTC and allows banks to provide digital asset custody and staking services. Additionally, the bill grants the CFTC regulatory authority over the spot digital commodities market, providing clear legal frameworks for exchanges and brokers. The Senate Banking Committee is scheduled to review on January 15, and if passed, it could prompt long-term, cautious traditional financial institutions to enter the market officially.

Ample liquidity, Bitcoin performance lagging

Liquidity is another key variable besides regulation. Global M2 supply hit a record high in Q4 2024 and continues to grow. Historically, Bitcoin tends to lead liquidity cycles, often rising before M2 peaks and consolidating at the peak. Current signs indicate liquidity will further expand, implying Bitcoin still has upside potential. If stock market valuations appear excessive, capital is likely to rotate into Bitcoin.

Macro factors adjusted to +25%, outlook remains robust

Overall, the macro trend of rate cuts and liquidity expansion remains unchanged. However, considering slowing institutional inflows, uncertainty over Fed leadership changes, and rising geopolitical risks, we have lowered the macro adjustment factor from +35% to +25%. Despite the reduction, this weight remains positive, and we believe regulatory progress and ongoing M2 expansion will support medium- to long-term upside.

$84,000 support level and $98,000 resistance level

On-chain indicators provide auxiliary signals for macro analysis. During the November correction, buy-the-dip funds concentrated around $84,000, forming a clear support zone. Bitcoin has now broken through this zone. The $98,000 level corresponds to the average cost basis of short-term holders and acts as a recent psychological and technical resistance.

On-chain data shows market sentiment shifting from short-term panic to neutrality. Key indicators like MVRV-Z (1.25), NUPL (0.39), and aSOPR (1.00) have exited the undervaluation zone and entered the equilibrium range. This suggests that while panic-driven explosive rallies are less likely, the market structure remains healthy. Combined with macro and regulatory factors, the statistical basis for medium- to long-term price appreciation remains strong.

It is noteworthy that the current market structure differs significantly from previous cycles. The increased proportion of institutional and long-term capital reduces the likelihood of panic-driven capitulation driven by retail investors. Recent corrections are more of a gradual rebalancing. Although short-term volatility is inevitable, the overall upward structure remains intact.

Target price revised to $185,500, bullish outlook remains firm

Using the TVM valuation framework, we derive a neutral baseline valuation of $145,000 for Q1 2026 (slightly below the previous report’s $154,000). Combining a 0% fundamental adjustment and a +25% macro adjustment, we set the revised target price at $185,500.

We have increased the fundamental adjustment factor from -2% to 0%. While network activity has not changed significantly, renewed market attention to the BTCFi ecosystem has offset some bearish signals. Additionally, due to the aforementioned slowdown in institutional inflows and geopolitical factors, we have lowered the macro adjustment factor from +35% to +25%.

This downward revision of the target price should not be seen as a bearish signal. Even after adjustment, the model still indicates about 100% upside potential. The lower baseline price mainly reflects recent volatility, while Bitcoin’s intrinsic value is expected to continue rising in the medium to long term. We believe the recent correction is a healthy rebalancing process, and the medium- to long-term bullish outlook remains unchanged.