Original Authors: Daniel Kim, Ryan Yoon, Jay Jo, Source: Tiger Research
In the face of increased market volatility, we maintain our target price of $200,000. This report assesses the nature of the current pullback and the persistence of long-term fundamentals.
Key Takeaways
- The U.S. government shutdown has lasted 35 days, causing short-term pressure — The U.S. Treasury's TGA liquidity is frozen, and Polymarket predictions show a 73% chance that the shutdown will continue past mid-November.
- Record-breaking forced liquidation events have impacted market sentiment — The forced liquidation on October 10 reached $20 billion, affecting 1.6 million traders, as the market cleared excessive leverage, triggering a temporary pullback.
- Fundamentals remain solid, and the long-term upward trend is unchanged — Global liquidity expansion, with M2 broad money supply exceeding $96 trillion, and institutional investors maintaining strategic buying, keep the Bitcoin target price at $200,000 unchanged.
Bitcoin Enters Adjustment Phase
After reaching an all-time high of $126,200 on October 6, Bitcoin has fallen about 20% over the past month and is currently consolidating around $100,000. The total cryptocurrency market cap has also dropped from $4.35 trillion at the beginning of October to the current $3.3 trillion, a decline of 22%, putting both Bitcoin and altcoins under pullback pressure.
This decline is not due to any negative news related to cryptocurrencies. The main reasons for the current weakness are the U.S. government shutdown, a shift in the stance of the Federal Reserve Chair, and a decrease in leverage.
U.S. Federal Government Shutdown Crisis
Since October 1, the U.S. federal government has been in a shutdown for 35 days, which is the main reason for the current market pullback. This crisis has led to a halt in government spending and created a policy vacuum in major financial regulatory agencies, including the U.S. Securities and Exchange Commission (SEC), limiting macro liquidity inflow into the cryptocurrency market. The payment freeze of the U.S. Treasury General Account (TGA) particularly hinders liquidity that should have entered the capital markets. Typically, when the TGA stops payments, the government halts spending but continues to collect taxes and issue bonds, thereby withdrawing liquidity from the system.
Although past U.S. government shutdowns have usually ended relatively mildly, the Republican and Democratic parties remain deadlocked in budget negotiations. According to Polymarket, there is a 73% chance that this situation will continue past mid-November, raising concerns that the recent market pullback will persist.
Powell's Hawkish Remarks
Federal Reserve Chair Jerome Powell stated after the October 29 Federal Open Market Committee (FOMC) meeting that a rate cut in December is "far from a done deal." This statement reduced the probability of a December rate cut from 95% to 68%, lowering expectations for accommodative monetary policy and exacerbating liquidity tensions in the cryptocurrency market.
Aftermath of the October 10 Liquidation
President Trump's tariff threats against China triggered a chain reaction on October 10, resulting in the largest leveraged liquidation in cryptocurrency history, amounting to approximately $20 billion. Over 1.6 million traders were liquidated, and the market has since exhibited extreme volatility. Recent reports indicate that $45 million worth of Bitcoin was transferred from a wallet allegedly associated with Barron Trump, further undermining investor confidence. However, this adjustment has reduced high-leverage positions, somewhat curbing market speculation.
Spread of Adjustments in the AI Sector
On November 4, concerns over valuations of AI-related companies led to a weakening of the public stock market. Despite strong earnings from Palantir, the company's stock fell 7.94% in after-hours trading due to Scion Asset Management's Michael Burry revealing** his short positions**. This adjustment in the AI sector also affected the cryptocurrency market. As the public stock market sold off high-growth stocks, the cryptocurrency market faced greater selling pressure due to its higher volatility.
Fundamentals Remain Unchanged
We maintain our Bitcoin target price of $200,000. While current market uncertainty appears high, we need to focus on those certain factors that remain unchanged. The momentum of global liquidity expansion is evident, with M2 money supply surpassing $96 trillion, and institutional support for digital assets remains strong. Major traditional financial companies continue to grow, the ETF market is structurally expanding, and stablecoins are gradually being adopted by institutions — these mid- to long-term growth drivers remain intact.
Throughout U.S. history, government shutdowns have ultimately ended with bipartisan consensus, and this time will be no different — it is just a matter of time. The direction of the Federal Reserve's rate cuts has not changed; only the pace remains to be seen. Most importantly, the fundamentals of Bitcoin have not changed at all. The network operates stably, and institutional investors continue to strategically accumulate.
When we consider these unchanging factors, the current adjustment stems from excessive leverage liquidation and temporary macro uncertainty — this is not enough to break the long-term upward trend.
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