This report is authored by Tiger Research, presenting our market outlook for Bitcoin in the first quarter of 2026, with a target price set at $185,500.
Key Points
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Macro Stability, Slowing Momentum: The Federal Reserve's interest rate cut cycle and M2 money supply growth remain on track. However, $4.57 billion in ETF outflows have impacted short-term trends. The advancement of the CLARITY Act could be a key catalyst for attracting major banks to enter the market.
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On-Chain Indicators Shift to Neutral: Buying demand around $84,000 has formed a solid bottom support level; meanwhile, $98,000, representing the cost basis for short-term holders, currently acts as the main resistance. Key indicators like MVRV-Z show the market is currently at fair value.
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Target Price $185,500, Maintaining Bullish View: 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 the current price.
Macro Easing Continues, Growth Momentum Weakens
Bitcoin is currently trading around $96,000. Since our last report on October 23, 2025, the price has declined by 12%. Despite the recent pullback, the macro backdrop supporting Bitcoin remains solid.
Fed Path Maintains Dovish Stance
Source: Tiger Research
The Federal Reserve implemented three consecutive 25-basis-point rate cuts from September to December 2025, totaling a 75 bps reduction, with the current rate in the 3.50%–3.75% range. The December dot plot projects the rate to fall to 3.4% by the end of 2026. While a single 50 bps or larger cut is unlikely this year, the potential appointment of a more dovish successor by the Trump administration after Chair Powell's term ends in May could ensure the continuation of the monetary easing trend.
Institutional Outflows and Sustained Corporate Buying
Despite a favorable macro environment, institutional demand has been weak recently. Spot ETFs recorded outflows of $4.57 billion in November and December, the largest since their launch. Annual net inflows reached $21.4 billion, down 39% from last year's $35.2 billion. While January's asset rebalancing brought some inflows, the sustainability of the rebound remains to be seen. Meanwhile, companies like MicroStrategy (holding 673,783 BTC, approx. 3.2% of supply), Metaplanet, and Mara continue to accumulate.
CLARITY Act as a Policy Catalyst
Against the backdrop of stagnant institutional demand, regulatory progress is becoming a potential driver. The CLARITY Act, passed by the House, clarifies the jurisdictional boundaries between the SEC and CFTC and allows banks to offer digital asset custody and staking services. Furthermore, the bill grants the CFTC regulatory authority over the digital commodity spot market, providing a clear legal framework for exchanges and brokers. The Senate Banking Committee is scheduled for review on January 15th. If passed, it could prompt long-hesitant traditional financial institutions to formally enter the market.
Abundant Liquidity, Bitcoin Performance Lags
Liquidity is another key variable besides regulation. Global M2 money supply hit a record high in Q4 2024 and continues its growth trend. Historically, Bitcoin often leads the liquidity cycle, typically rising before M2 peaks and consolidating during the peak phase. Current signs point to further liquidity expansion, suggesting Bitcoin still has upside potential. If equity market valuations appear stretched, capital could likely rotate into Bitcoin.
Macro Factor Adjusted Down to +25%, Outlook Remains Robust
Overall, the macro direction of rate cuts and liquidity expansion remains unchanged. However, considering slowing institutional inflows, uncertainty around the Fed leadership transition, and rising geopolitical risks, we have lowered our macro adjustment factor from +35% to +25%. Despite this reduction, the weighting remains in positive territory. We believe regulatory progress and continued M2 expansion will provide core support for medium to long-term appreciation.
$84,000 Support and $98,000 Resistance
On-chain indicators provide supplementary signals to the macro analysis. During the correction in November 2025, dip-buying was concentrated around $84,000, forming a clear support zone. Bitcoin has since broken above this range. The $98,000 level corresponds to the average cost basis of short-term holders, constituting a near-term psychological and technical resistance.
On-chain data shows market sentiment is shifting from short-term panic to neutral. Key indicators like MVRV-Z (1.25), NUPL (0.39), and aSOPR (1.00) have moved out of the undervalued zone into an equilibrium range. This means the possibility of explosive, panic-driven rallies has diminished, but the market structure remains healthy. Combined with the macro and regulatory backdrop, the basis for medium to long-term price appreciation remains statistically sound.
Notably, the current market structure is significantly different from previous cycles. The increased proportion of institutional and long-term capital reduces the probability of retail-driven panic sell-offs. Recent pullbacks have manifested more as gradual rebalancing. While short-term volatility is inevitable, the overall upward structure remains intact.
Target Price Adjusted to $185,500, Bullish Outlook Firm
Applying 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 raised the fundamental adjustment factor from -2% to 0%. Although network activity shows little change, renewed market focus on the BTCFi ecosystem has effectively offset some bearish signals. Concurrently, due to the aforementioned slowdown in institutional inflows and geopolitical factors, we have lowered the macro adjustment factor from +35% to +25%.
This target price reduction should not be interpreted as a bearish signal. Even after the adjustment, the model still indicates approximately 100% potential upside. The lower baseline price primarily reflects recent volatility, while Bitcoin's intrinsic value will continue to appreciate over the medium to long term. We view the recent pullback as a healthy rebalancing process, and our medium to long-term bullish outlook remains unchanged.
