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

Author: Tiger Research

Translation: AididiaoJP, Foresight News

Original link:

Disclaimer: This article is a reprint. Readers can obtain more information through the original link. If the author has any objections to the reprint, please contact us, and we will make modifications according to the author’s requirements. Reprints are for information sharing only, do not constitute any investment advice, and do not represent Wu Shuo’s views and positions.

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 a net inflow 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 Federal Reserve’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, the price is $70.5k, about 13% below the long-term holder average entry cost of $78k. Breaking this level will be a major signal of a short-term trend reversal.

The target price of $143k and a 2x upside potential still stand: Based on a neutral benchmark of $132.5k, combined with a -10% fundamental adjustment and +20% macro adjustment. 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.

The macro tailwinds are still present, but momentum has slowed

Since the release of the Q1 report, Bitcoin has fallen about 27%, with the average price in early April 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.

Liquidity hits record highs but has not effectively transmitted to Bitcoin

As of February 2026, global M2 continues to expand to nearly $13.44 trillion, a record high. However, Bitcoin has declined 27% from Q1. Liquidity and prices 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 the official shift toward easing in Q1.

The US contribution is only 10%. The problem is that liquidity from China has limited channels into the Bitcoin market. Domestic crypto trading restrictions still exist, and indirect channels via Hong Kong and Singapore mainly serve institutional funds. Global liquidity is at a historic peak, but the share that can actually reach Bitcoin is shrinking.

Iran conflict slows down Fed rate cuts

Due to the constrained transmission of liquidity from China, dollar liquidity remains the main driver for Bitcoin. But even this part 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 oil 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 rate cut space has consequently narrowed. The March dot plot reduced the 2026 rate cut expectation to just once.

Nevertheless, the easing bias remains unchanged. In mid-April, the Strait of Hormuz partially reopened, and oil prices fell sharply back to around $90. Core CPI stabilized at 2.6%, indicating the shock has not fully spread to the broader 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 tendency is likely to persist. The number of rate cuts may decrease, but the direction remains unchanged.

Institutional capital flow begins to reverse

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

Corporate accumulation actions are 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.

Macro indicators revised down to +20%

Structural tailwinds remain intact: liquidity expansion, policy easing bias, institutional fund inflows returning to positive, and progress on the US CLARITY Act. Recent headwinds—such as the Iran oil shock and slowed 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 equilibrium

On-chain indicators have exited extreme panic zones, transitioning from undervaluation toward early recovery. Key metrics 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 the average one-year return from this zone 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 decreasing. This indicates that speculative funds are exiting, while new buyers are accumulating at lower prices. The timing aligns with ETF net inflows and large-scale buying by Strategy, supporting the view that institutional investors are continuously accumulating in the discount zone, thereby lowering the 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 loss territory, representing an extreme bottom scenario. The strongest resistance is at $78k, coinciding with the long-term holder average entry cost.

The current price of $70.5k is about 13% below this resistance level, with many recent short-term entrants in unrealized loss. A decisive breakout 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% year-over-year. 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, a 34.1% decrease from the previous quarter’s 1.80 BTC. Transaction count 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 BTCFi 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 has decreased 10%, and now accounts for only 0.46% of Bitcoin’s total supply (91,332 BTC). While protocols like Babylon and Lombard have seen some growth, the overall 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 an average price in early April 2026, the neutral benchmark is set at $132.5k. After adjusting for -10% fundamental 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 range expands from +93% in Q1 to +103% in Q2.

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

Three short-term observation points:

1. Decisive breakout above the network’s mid-term equilibrium at $78k;

2. Continued net inflows into ETFs;

3. Fed policy shift after geopolitical risk easing.

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