Q2 2026 Bitcoin Valuation Report: $143,000, doubling the upside potential

Key Points

This report is written by Tiger Research. The macro environment remains supportive, although the pace has slowed: global M2 has reached a historic high of $13.44 trillion, and Bitcoin ETF fund flows have turned to net inflows for the first time in 14 months. However, the oil shock triggered by the Iran conflict has pushed March CPI up to 3.3%, narrowing the Federal Reserve's rate cut path.

Bitcoin on-chain indicators are shifting from undervaluation to early equilibrium: key on-chain indicators have moved out of the panic zone from the first quarter. The current price is $70,500, about 13% lower than the average entry cost of long-term holders at $78,000. Breaking this level will be a major signal for a short-term trend reversal.

The target price of $143,000 and the potential for a 2x increase remain valid: based on a neutral benchmark of $132,500, adjusted for fundamentals -10% and macro +20%. This is a downward adjustment from the first quarter's target of $185,500, but the significant pullback in spot prices means that the actual upside potential from current levels has actually increased.

Macro Tailwinds Remain, But Momentum Has Slowed

Since the first quarter report was released, Bitcoin has dropped about 27%, with the average price hovering around $70,500 in early April. The Iran conflict has introduced a new variable, but the overall macro environment remains favorable. What has changed is not the direction, but the speed.

Liquidity is at record highs but has not effectively transmitted to Bitcoin.

As of February 2026, global M2 continues to expand to nearly $13.44 trillion. However, Bitcoin has fallen 27% since the first quarter. Liquidity and prices are showing inverse movements.

The source of liquidity explains this divergence. Over the past year, more than 60% of M2 growth in the four major economies (China, the United States, the Eurozone, and Japan) has come from China, thanks to the People's Bank of China's reserve requirement ratio cuts and the formal shift to an easing stance in the first quarter.

The contribution from the U.S. is only 10%. The problem is that the channels for liquidity from China to enter the Bitcoin market are limited. Domestic cryptocurrency trading restrictions still exist, and indirect channels through Hong Kong and Singapore mainly serve institutional funds. Global liquidity is at historical peaks, but the share that can actually reach the Bitcoin market is shrinking.

Iran Conflict Slows Fed Rate Cuts

Due to the obstruction of liquidity transmission from China, dollar liquidity remains the main driving force for Bitcoin. However, even this has been delayed due to the Iran conflict.

After the U.S. and Israel launched strikes against Iran on February 28, the Strait of Hormuz was blocked. Brent crude oil surged to $118 per barrel in mid-March, and Dubai crude reached a historic high of $166 per barrel. This shock directly pushed inflation higher. The U.S. March CPI rose from 2.4% in February to 3.3%, marking a two-year high. Consequently, the Fed's rate cut space has narrowed. The March dot plot reduced the expectation for rate cuts in 2026 to just one.

Nevertheless, the direction of easing has not changed. In mid-April, the Strait of Hormuz partially reopened, and oil prices significantly retreated to around $90. Core CPI stabilized at 2.6%, indicating that the shock has not yet fully spread to the overall economy. President Trump officially nominated Kevin Warsh as the next Fed chair at the end of January, and Senate confirmation hearings are ongoing. Powell's term will end on May 15, and the tendency for easing is likely to continue. The number of rate cuts may decrease, but the direction remains unchanged.

Institutional Fund Flows Begin to Reverse

The institutional outflows that drove the decline in the first quarter have begun to reverse. Bitcoin spot ETFs recorded their worst monthly outflow since their launch in November 2025 and have been in a net outflow state for five consecutive months. However, since March, monthly net inflows have turned positive. As of mid-April, cumulative fund flows for the year have turned positive, and total assets under management have rebounded to $96.5 billion.

Corporate accumulation of Bitcoin is also accelerating. Strategy spent $2.54 billion to buy 34,164 Bitcoins in a single week (April 13-19), increasing total holdings to 815,061 BTC. However, the number of companies participating in this trend has not significantly increased.

Macro Indicators Adjusted to +20%

Structural tailwinds remain intact: liquidity expansion, a tendency for policy easing, institutional fund flows returning to positive, and progress on the U.S. CLARITY Act. Recent headwinds—oil shocks triggered by Iran and the Fed's slowing rate cuts—have partially offset these positives. The macro indicators for the second quarter have been adjusted down by 5 percentage points from the first quarter to +20%.

From Undervaluation to Early Equilibrium

On-chain indicators have moved out of the extreme panic zone and are transitioning towards the boundaries of undervaluation and equilibrium. Key indicators such as MVRV-Z, NUPL, and aSOPR have exited the panic zone from the first quarter and entered the early recovery phase. While a significant rebound like that seen during panic zone rebounds is unlikely, historical data shows that the average one-year return from this area has consistently remained in double digits. The risk-reward ratio at this time is still in the most favorable position.

It is noteworthy that the average cost basis of short-term holders (STH) is gradually decreasing. This indicates that speculative funds are exiting, while new buyers are accumulating at lower price levels. The timing aligns with the restart of ETF net inflows and Strategy's large-scale purchases, supporting the judgment that institutional investors are continuously accumulating in the discounted range, thereby lowering the average entry cost.

The key risk level is $54,000, which is the average cost basis across the network. If it falls below this level, the entire network will enter an unrealized loss state, becoming a bottom in extreme scenarios. The strongest resistance level is at $78,000, coinciding with the average entry cost of long-term holders.

The current price of $70,500 is about 13% lower than this resistance level, and a large amount of recently entered short-term funds are in an unrealized loss state. A decisive breakthrough above $78,000 in the short term is worth close attention.

Surface Growth, Underlying Stagnation

In the first half of April, Bitcoin's daily average trading volume reached 564,000 transactions, a year-on-year increase of 37.9%. The surface data looks impressive, but the details tell a different story.

During the same period, the number of active addresses dropped to 428,000, a year-on-year decrease of 13.2% and a month-on-month decrease of 4.2%. The average transaction size fell to 1.19 BTC, down 34.1% from the previous quarter's 1.80 BTC. The number of transactions has increased, but the number of participants and the value per transaction are both declining. This pattern reflects a few users repeatedly making small transactions rather than widespread economic utilization of the network. A significant portion of the growth in trading volume may come from mechanical liquidity such as exchange deposits, unrelated to real growth.

The first quarter report maintained the fundamental indicators at 0%, based on expectations of BTCFi ecosystem expansion. Entering the second quarter, this argument has clearly weakened. According to The Block's "2026 Digital Asset Outlook," Bitcoin L2 TVL has dropped 74% year-to-date, and BTCFi's total TVL has decreased by 10%, accounting for only 0.46% of Bitcoin's total supply (91,332 BTC). Although individual protocols like Babylon and Lombard have seen growth, the entire ecosystem has contracted.

Fundamental Indicators Adjusted to -10%

Surface growth has not translated into real network expansion, and the underlying data supporting the BTCFi argument has weakened. The balance of positive and negative signals that offset each other in the first quarter has been broken. The fundamental indicators for the second quarter have been adjusted down from 0% to a baseline of -10%.

Target Price of $143,000, Still with 2x Upside Potential

Using the TVM method, the neutral benchmark calculated based on the average price in early April 2026 is $132,500. After adjusting for fundamentals -10% and macro +20%, the 12-month target price is set at $143,000.

This figure is about 23% lower than the first quarter's target of $185,500. However, the actual upside potential has expanded. Based on average prices, the upside space has increased from +93% in the first quarter to +103% in the second quarter.

The downward adjustment of the target price does not indicate pessimism. The macro direction and on-chain structure still support the logic of a medium to long-term bull market.

Three short-term observation points:

• A decisive breakthrough above the mid-term equilibrium level of $78,000;
• Continued net inflows into ETFs;
• A shift in Fed policy after geopolitical risks ease.

If these three conditions are met simultaneously, the target of $143,000 remains achievable.