Q2 2026 Bitcoin Valuation Report: $143k, Doubling the Upside Potential

Author: Daniel Kim, Ryan Yoon, Jay Jo; Source: Tiger Research; Compiled by: Shaw Jinse Finance

Key Takeaways

• Despite slowing growth, the macro environment remains supportive: Global M2 money supply hit a historical high of $134.4 trillion. ETF capital inflows turned positive for the first time in 14 months. However, Iran’s oil price collapse pushed March CPI up to 3.3%, narrowing the Fed’s room to cut rates.

• Bitcoin on-chain indicators are shifting from undervaluation to early equilibrium: Key on-chain metrics have moved out of the Q1 panic zone. The current price is $70,500, about 13% below the long-term holder average entry price of $78,000. Breaking above this level is the main signal of a recent trend reversal.

• The $143,000 target price and 2x upside potential remain valid: This target is derived from a neutral benchmark price of $132,500, with a 10% downward adjustment for fundamentals and a 20% upward adjustment for macro factors. Although this is lower than the Q1 target price of $185,500, the larger spot pullback means that the upside from current levels has actually expanded.

Macro bullish factors remain, but growth is slowing

Since the release of the first-quarter report, the price of Bitcoin has fallen by about 27%, and the average trading price in early April is close to $70,500. The Iran conflict introduced a new variable, but the overall macro environment remains favorable. What has changed is not the direction, but the pace.

Liquidity hits a record high but fails to flow into Bitcoin

As of February 2026, global M2 money supply continues to grow, approaching a historical high of nearly $134 trillion. However, Bitcoin’s price is down 27% from Q1. Liquidity and price action are moving in opposite directions.

The source of liquidity explains this gap. In the past year, in the M2 growth of the four major economies (China, the United States, the Eurozone, and Japan), more than 60% came from China, thanks to the People’s Bank of China cutting the reserve requirement ratio in Q1 and adopting formal easing policies.

The U.S. contributed only 10% of the funds. The issue is that there are limited channels for liquidity coming from within China to flow into the Bitcoin market. Crypto trading restrictions still exist, and the indirect channels via Hong Kong and Singapore mainly serve institutional capital flows. Global liquidity is at a historical high, but the portion that can actually flow into Bitcoin has declined.

The Iran conflict slows the Fed’s rate-cut pace

Because liquidity from China is largely blocked, U.S. dollar liquidity remains the main driver for Bitcoin. But even so, the Iran conflict has delayed this process.

After the U.S. and Israel launched airstrikes on Iran on February 28, the Strait of Hormuz was blocked. In mid-March, Brent crude jumped to $118 per barrel, and Dubai crude even reached a historical high of $166 per barrel. This shock directly pushed up inflation. The U.S. Consumer Price Index (CPI) surged from 2.4% in February to 3.3% in March, the highest level in two years. The Fed’s room to cut rates also narrowed. The March dot plot shows the market expects the Fed to cut rates only once in 2026.

Even so, the direction of easing policy has not changed. In mid-April, parts of the Strait of Hormuz reopened, and oil prices fell sharply to around $90 per barrel. Core CPI stabilized at 2.6%, meaning the shock has not yet spread to the broader economy. President Trump officially nominated Kevin Woush as the next Fed Chair in late January, and Senate confirmation hearings are still underway. Powell’s term ends on May 15, and the bias toward easing policies may continue. The number of rate cuts may decrease, but the direction remains the same.

Institutional capital flow reverses

Institutional fund outflows that drove the Q1 decline have started to reverse. Bitcoin spot ETFs experienced their worst monthly outflows since their launch in November 2025, and maintained net outflows for five consecutive months. However, since March, monthly net inflows have turned positive. By mid-April, cumulative inflows year-to-date also turned positive, and total assets under management rebounded to $96.5 billion.

The pace of corporate buying of Bitcoin is also accelerating. Strategy spent $2.54 billion to buy 34,164 BTC in just one week (April 13 to 19), bringing its total holdings to 815,061 BTC. But it’s worth noting that the number of companies participating in this trend has not increased significantly.

Macro indicators downgraded to +20%

Structural bullish factors still exist: liquidity expansion, an easing policy bias, a recovery in institutional capital inflows, and progress on the U.S. CLARITY Act. Short-term negatives such as the Iran oil crisis and the Fed’s slowing rate-cut pace partially offset these positives. The adjusted macroeconomic indicators for Q2 are down 5% from Q1 to +20%.

From undervaluation to early equilibrium

On-chain indicators have moved out of extreme panic, transitioning across the boundary between undervaluation and equilibrium. Key metrics, including MVRV-Z, NUPL, and aSOPR, have broken out of the Q1 panic zone and entered an early recovery phase. A sharp surge like those seen when rebounding out of panic zones is unlikely to occur again, but the average historical annual return in this area has remained in double digits. At present, the risk-reward ratio remains very favorable.

Notably, the average cost basis of short-term holders (STH) has been steadily declining. This suggests that speculative capital is exiting while new buyers are purchasing at lower prices. This timing aligns with the resumption of ETF net inflows and Strategy’s large-scale buying, supporting the view that institutional buyers have been accumulating at discounts and bringing down the average entry price.

The key risk level is $54,000, which is the average cost basis. Falling below this threshold would cause unrealized losses across the entire network, making this level a bottom in extreme scenarios. The strongest resistance level is $78,000, which coincides with the long-term holders’ average buy price.

The current price is $70,500, about 13% below that level. A large amount of recently deployed short-term capital is currently sitting on unrealized losses. If the price decisively breaks above $78,000 in the near term, it’s worth keeping a close watch.

Surface growth, real stagnation

In the first half of April, Bitcoin’s daily average trading volume reached 564,000 transactions, up 37.9% year over year. On the surface, the data looks strong, but the details say otherwise.

In the same period, the number of active addresses fell to 428,000, down 13.2% year over year and down 4.2% quarter over quarter. The average transaction value dropped to 1.19 BTC, down from 1.80 BTC in the previous quarter, a decline of 34.1%. While the number of transactions increased, the number of participants and the value per transaction both declined. This trend reflects a small number of users repeatedly shifting small amounts, rather than the network seeing broader economic usage. The increase in transaction counts is likely mainly due to mechanical capital flows such as exchange deposits, not real network growth.

The Q1 report kept fundamental indicators at 0% based on expectations of expansion in the BTCFi ecosystem. But in Q2, this outlook has weakened. According to The Block’s “2026 Digital Asset Outlook,” Bitcoin L2 total value locked (TVL) has dropped 74% year-to-date. BTCFi’s total TVL is down 10%, accounting for only 0.46% of Bitcoin’s total supply (91,332 BTC). Although certain individual protocols such as Babylon and Lombard show selective growth, the overall ecosystem is shrinking.

Fundamentals downgraded to -10%

Surface growth has not translated into actual network expansion, and the data supporting the BTCFi thesis has weakened. The balance of positive and negative signals that supported the 0% reading in Q1 has been broken. Therefore, the fundamentals for Q2 have been downgraded from 0% to -10%.

Target price of $143,000, 2x upside potential

Applying the time value approach to the average price in early April 2026 yields a neutral benchmark price of $132,500. With a -10% adjustment to fundamentals and a +20% adjustment to macro indicators, the 12-month target price is set at $143,000.

This figure is about 23% lower than the Q1 target price of $185,500. However, the actual upside potential has expanded. Based on the average price, the upside has expanded from 93% in Q1 to 103% in Q2.

A lower target price does not imply pessimism. The macro direction and on-chain structure continue to support a bullish view in the medium to long term.

Three near-term key milestones: 1) Break through the network’s mid-term equilibrium level of $78,000; 2) Continued ETF capital inflows; 3) A Fed policy shift after geopolitical risk eases. If all three conditions are met at the same time, the $143,000 target price remains achievable.