Exploring Bitcoin Valuation in 2026 from a Macro and On-Chain Structural Perspective

Author: Tiger Research

Original compilation: AididiaoJP, Foresight News

Key Points

The macro environment remains supportive, despite a slowdown in pace: Global M2 hits a record high of $13.44 trillion, and Bitcoin ETF capital flows have turned into net inflows for the first time in 14 months. However, the oil shock triggered by the Iran conflict pushed March CPI up to 3.3%, narrowing the Fed’s rate cut path.

On-chain Bitcoin indicators are shifting from undervaluation toward early equilibrium: Key on-chain metrics have exited the panic zone of Q1. Currently priced at $70.5k, about 13% below the long-term holder average entry cost of $78k. Breaking this level would be a major signal of a short-term trend reversal.

The target price of $143k and a 2x upside potential remain valid: Based on a neutral benchmark of $132.5k, with adjustments of -10% for fundamentals and +20% for macro factors. The target has been lowered from $185.5k in Q1, but the significant retracement in spot prices means the actual upside from current levels has expanded.

Macro tailwinds persist, but momentum has slowed

Since the release of the Q1 report, Bitcoin has fallen about 27%, with April’s average hovering around $70.5k. The Iran conflict introduced a new variable, but the overall macro environment remains favorable. The difference is not in direction but in speed.

Record-high liquidity but ineffective transmission to Bitcoin

As of February 2026, global M2 continues to expand to nearly $13.44 trillion, a record high. Yet, Bitcoin has declined 27% from Q1. Liquidity and price are moving in opposite directions.

The source of liquidity explains this divergence. Over the past year, more than 60% of M2 growth in the four major economies (China, US, Eurozone, Japan) came from China, thanks to the People’s Bank of China’s reserve requirement ratio cuts and a shift toward easing in Q1.

The US contribution is only 10%. The issue is that liquidity from China has limited channels into Bitcoin markets. Domestic crypto trading restrictions remain, and indirect channels via Hong Kong and Singapore mainly serve institutional funds. Global liquidity is at a historic peak, but the share reaching Bitcoin markets is shrinking.

Iran conflict slows down Fed rate cuts

Due to constrained liquidity transmission from China, dollar liquidity remains the main driver for Bitcoin. But even this has been delayed by the Iran conflict.

After the US and Israel launched strikes on Iran on February 28, the Strait of Hormuz was blocked. Brent crude surged to $118 per barrel in mid-March, and Dubai crude hit a record high of $166 per barrel. This shock directly pushed up inflation. US March CPI rose from 2.4% in February to 3.3%, a two-year high. The Fed’s room for rate cuts narrowed accordingly. The March dot plot revised down expectations to only one cut in 2026.

Nevertheless, the easing stance remains unchanged. In mid-April, parts of the Strait of Hormuz reopened, and oil prices fell sharply back to around $90. Core CPI stabilized at 2.6%, indicating the shock has not fully propagated through the economy. President Trump officially nominated Kevin Warsh as the next Fed Chair at the end of January, with Senate confirmation hearings underway. Powell’s term ends on May 15, and the easing bias is likely to persist. The number of rate cuts may decrease, but the direction remains unchanged.

Institutional capital flows are beginning to reverse

The outflows that drove Q1 declines have started to turn around. Bitcoin spot ETFs, launched in November 2025, experienced their worst monthly outflows and have been in net outflow for five consecutive months. However, since March, monthly net inflows have resumed. By mid-April, cumulative capital flows for the year turned positive, with total assets under management rising to $96.5 billion.

Corporate accumulation is also accelerating. Strategy bought 34,164 BTC worth $2.54 billion 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.

Macroeconomic indicators revised down to +20%

Structural tailwinds remain intact: liquidity expansion, policy easing bias, institutional capital flow recovery, and progress on the US CLARITY Act. Recent headwinds—such as the Iran-induced oil shock and slowing Fed rate cuts—partially offset these positives. Macro indicators for Q2 have been revised downward by 5 percentage points from Q1, to +20%.

From undervaluation to early balance

On-chain metrics have exited extreme panic zones, transitioning toward undervaluation and early equilibrium boundaries. Key indicators like MVRV-Z, NUPL, and aSOPR have moved out of the panic zone of Q1 into early recovery stages. While large surges during panic rebounds are unlikely, historical data shows that starting from this region, the one-year average return remains double-digit. The risk-reward ratio at this point is still highly favorable.

Notably, the average cost basis for short-term holders (STH) is gradually declining. This indicates that speculative funds are exiting, while new buyers are accumulating at lower prices. The timing aligns with ETF net inflows restarting and large-scale buying by Strategy, supporting the view that institutional investors are continuously accumulating at discounted levels, lowering their average entry cost.

The key risk level is $54k, which is the network’s average cost basis. Falling below this would put the entire network into unrealized losses, representing an extreme bottom scenario. The strongest resistance is at $78k, coinciding with the long-term holder average entry cost.

Current price at $70.5k is about 13% below this resistance, with many recent short-term entrants in unrealized loss. A decisive break above $78k in the near term warrants close attention.

Surface growth, underlying stagnation

In the first half of April, Bitcoin’s daily trading volume reached 564k transactions, up 37.9% YoY. The surface data looks impressive, but the details tell a different story.

Active addresses declined to 428k, down 13.2% YoY and 4.2% MoM. The average transfer size dropped to 1.19 BTC from 1.80 BTC last quarter—a 34.1% decrease. Transaction counts increased, but participation and per-transaction value both declined. This pattern reflects a small number of users repeatedly making small transfers, rather than broad economic activity. Much of the volume increase may come from exchange deposits and mechanical flows, not genuine growth.

The Q1 report maintained fundamental metrics at 0%, based on expectations of ecosystem expansion. By Q2, this thesis has weakened significantly. According to The Block’s “2026 Digital Asset Outlook,” Bitcoin’s Layer 2 TVL has fallen 74% year-to-date, BTCFi’s total TVL down 10%, and only 0.46% of Bitcoin’s total supply (91,332 BTC) is in BTCFi. While protocols like Babylon and Lombard have seen some growth, the entire ecosystem has contracted.

Fundamental metrics revised down to -10%

Surface growth has not translated into real network expansion, and the underlying data supporting BTCFi has weakened. The balance of positive and negative signals from Q1 has been broken. In Q2, fundamental metrics are revised downward from 0% to -10%.

Target price of $143k, with 2x upside potential

Using the TVM method, based on the average price in early April 2026, the neutral benchmark is set at $132.5k. After adjusting for -10% fundamentals and +20% macro factors, the 12-month target price is $143k.

This figure is about 23% lower than the $185.5k target in Q1. However, the actual upside potential has increased. From the average price perspective, the upside expands from +93% in Q1 to +103% in Q2.

Lowered target does not imply pessimism. The macro direction and on-chain structure still support a medium- to long-term bull case.

Three short-term observation points:

• Decisive breakout above the mid-term equilibrium level of $78k;
• Continued net inflows into ETFs;
• Policy shift after geopolitical risk eases.

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