This report, written by Tiger Research , presents our market outlook for Bitcoin in the first quarter of 2026, with a target price of $185,500.
Key points
- Macroeconomic stability, but slowing momentum: The Fed's rate-cutting cycle and M2 money supply growth remain on track. Nevertheless, a $4.57 billion outflow from ETFs impacted short-term trends. Progress on the Claritical Act could be key to attracting large banks to participate.
- On-chain indicators have turned neutral: buying demand around $84,000 has formed solid bottom support; while $98,000, as the cost line for short-term holders, now constitutes a major resistance level. Key indicators such as MVRV-Z suggest that the market is currently at fair value.
- We maintain our bullish view with a target price of $185,500: Based on a baseline valuation of $145,000 and a +25% adjustment for macroeconomic factors, we set our target price at $185,500. This implies approximately 100% upside potential from the current price.
Macroeconomic easing continues, but growth momentum weakens.
Bitcoin is currently trading around $96,000. The price has fallen 12% since our last report on October 23, 2025. Despite the recent pullback, the macroeconomic backdrop supporting Bitcoin remains solid.
The Fed maintains a dovish stance.
Source: Tiger Research
The Federal Reserve cut interest rates three times between September and December 2025, totaling 75 basis points, bringing the current rate to 3.50%–3.75%. The December dot plot projects rates to fall to 3.4% by the end of 2026. While a single rate cut of 50 basis points or more is unlikely this year, with Powell's term ending in May, the Trump administration is likely to appoint a more dovish successor, which would ensure the continuation of the monetary easing trend.
Institutional fund outflows and continued corporate buying
Despite a favorable macroeconomic environment, institutional demand has been weak recently. Spot ETFs recorded $4.57 billion in outflows during November and December, the largest outflow since product launches. Annual net inflows totaled $21.4 billion, a 39% decrease from $35.2 billion last year. While asset rebalancing in January brought some inflows, the sustainability of the rebound remains to be seen. Meanwhile, companies such as MicroStrategy (holding 673,783 BTC, approximately 3.2% of the total supply), Metaplanet, and Mara continue to increase their holdings.
The Clarity Act as a Policy Catalyst
Against the backdrop of stagnant institutional demand, regulatory progress is emerging as a potential driving force. The CLARITY Act, passed by the House of Representatives, clarifies the jurisdictional boundaries between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (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 to consider the bill on January 15th; if passed, it could prompt long-dormant traditional financial institutions to formally enter the market.
With ample liquidity, Bitcoin's performance has lagged.
Liquidity is another key variable besides regulation. Global M2 supply hit a record high in the fourth quarter of 2024 and continues to grow. Historically, Bitcoin tends to lead liquidity cycles, typically rising before M2 peaks and then consolidating at the peak. Current indications suggest further expansion of liquidity, meaning Bitcoin still has upside potential. If stock market valuations appear overvalued, funds are likely to rotate into Bitcoin.
Macroeconomic factors revised down to +25%, outlook remains robust.
Overall, the macroeconomic direction of interest rate cuts and liquidity expansion remains unchanged. However, considering the slowdown in institutional inflows, uncertainty surrounding the change in leadership at the Federal Reserve, and rising geopolitical risks, we have lowered the macro adjustment factor from +35% to +25%. Despite the reduction, this weighting remains in the positive range, and we believe that regulatory progress and continued M2 expansion will provide core support for medium- to long-term growth.
Support level at $84,000 and resistance level at $98,000
On-chain indicators provide auxiliary signals for macro analysis. During the correction in November 2025, bargain hunters concentrated around $84,000, forming a clear support zone. Bitcoin has now broken out of this range. The $98,000 level corresponds to the average cost of short-term holders, constituting recent psychological and technical resistance.
On-chain data shows that market sentiment is shifting from short-term panic to neutral. Key indicators such as MVRV-Z (1.25), NUPL (0.39), and aSOPR (1.00) have all moved out of the undervalued zone and into the equilibrium range. This means that while the likelihood of a panic-driven explosive rise has decreased, the market structure remains healthy. Combined with the macroeconomic and regulatory context, the statistical basis for a medium- to long-term upward trend in prices remains strong.
It's worth noting that the current market structure differs significantly from previous cycles. The increased proportion of institutional and long-term capital has reduced the probability of panic selling driven by retail investors. The recent correction is more of a gradual rebalancing process. While short-term volatility is inevitable, the overall upward structure remains intact.
Target price adjusted to $185,500, bullish outlook remains firm.
Applying the TVM valuation framework, we arrive at a neutral benchmark valuation of $145,000 for Q1 2026 (slightly lower than the $154,000 in our previous report ). Incorporating a 0% fundamental adjustment and a +25% macro adjustment, we revise our target price to $185,500 .
We are raising our fundamental adjustment factor from -2% to 0%. While network activity remained largely unchanged, renewed market focus on the BTCFi ecosystem effectively offset some of the bearish signals. Meanwhile, due to the aforementioned slowdown in institutional inflows and geopolitical factors, we are lowering our macro adjustment factor from +35% to +25%.
This downward revision of the target price should not be interpreted as a bearish signal. Even after the adjustment, the model still indicates approximately 100% potential upside in the market. The lower benchmark price primarily reflects recent volatility, while Bitcoin's intrinsic value will continue to rise in the medium to long term. We believe the recent pullback is a healthy rebalancing process, and our medium- to long-term bullish outlook remains unchanged.
