Authors: Daniel Kim, Ryan Yoon, Jay Jo
Source: Tiger Research
Amidst escalating market volatility, we firmly maintain our Bitcoin target price of $200,000. This report delves into the nature of the current market pullback and reaffirms the enduring strength of long-term fundamentals.
Key Insights
- Prolonged US Government Shutdown Exerts Short-Term Pressure: The 35-day shutdown has frozen US Treasury General Account (TGA) liquidity, with Polymarket predicting a 73% chance of its continuation beyond mid-November.
- Record Liquidations Impacted Market Sentiment: October 10 saw an unprecedented $20 billion in forced liquidations, affecting 1.6 million traders. This event, while painful, effectively cleared excessive leverage, leading to a temporary market correction.
- Fundamentals Remain Robust, Long-Term Uptrend Intact: Global liquidity continues to expand, with M2 money supply exceeding $96 trillion. Institutional investors are maintaining strategic accumulation, reinforcing our unwavering $200,000 Bitcoin price target.
Bitcoin Enters a Period of Adjustment
After reaching a historical high of $126,200 on October 6, Bitcoin has experienced an approximately 20% decline over the past month, currently consolidating around the $100,000 mark. The broader cryptocurrency market capitalization has also mirrored this trend, falling by 22% from $4.35 trillion in early October to its current $3.3 trillion, putting both Bitcoin and altcoins under significant correction pressure.
Crucially, this downturn is not rooted in any negative news specific to the cryptocurrency space. Instead, a confluence of macro factors—namely, the US government shutdown, a shift in the Federal Reserve Chair’s stance, and a reduction in market leverage—are the primary drivers behind the current market weakness.
The US Federal Government Shutdown Crisis
The ongoing US federal government shutdown, now in its 35th day since October 1, stands as a pivotal cause of the current market correction. This crisis has led to a freeze in government spending and created a policy vacuum within key financial regulatory bodies, including the US Securities and Exchange Commission (SEC), thereby restricting the flow of macro liquidity into the cryptocurrency market. Specifically, the freeze on payments from the US Treasury General Account (TGA) has notably impeded liquidity that would typically flow into capital markets. Historically, when the TGA ceases payments, government spending halts, yet tax collection and bond issuance continue, effectively withdrawing liquidity from the broader financial system.
While past US government shutdowns have typically concluded with relatively swift resolutions, the current budget negotiations between Republicans and Democrats remain deadlocked. Polymarket data indicates a high probability of 73% for the shutdown to persist beyond mid-November, fueling concerns about the duration of this recent market pullback.
Powell’s Hawkish Remarks
Following the Federal Open Market Committee (FOMC) meeting on October 29, Federal Reserve Chair Jerome Powell stated that a December rate cut was “far from guaranteed.” These hawkish comments caused the probability of a December rate cut to drop significantly from 95% to 68%, tempering expectations for looser monetary policy and exacerbating liquidity tensions within the cryptocurrency market.
Aftermath of the October 10th Liquidation Event
President Trump’s tariff threats triggered a cascading event on October 10, resulting in the largest leveraged liquidation in cryptocurrency history, totaling approximately $20 billion. Over 1.6 million traders were liquidated, leading to extreme market volatility in the aftermath. Recent news of a $45 million Bitcoin transfer from a wallet reportedly linked to Barron Trump further dented investor confidence. However, this adjustment also served a critical purpose: it purged excessive leveraged positions, thereby curbing speculative behavior in the market.
AI Sector Adjustment Spreads
On November 4, the public stock market weakened due to investor concerns regarding the valuations of artificial intelligence (AI) related companies. Despite strong earnings from Palantir, its stock price declined by 7.94% in after-hours trading following the disclosure of a short position by Scion Asset Management’s Michael Burry. This adjustment in the AI sector has had ripple effects, extending to the cryptocurrency market. As the public equity market sheds high-growth stocks, the crypto market, with its inherently higher volatility, faces amplified selling pressure.
Unaltered Fundamentals
We reiterate our Bitcoin target price of $200,000. While current market uncertainties appear elevated, it is crucial to focus on the immutable certainties. The momentum of global liquidity expansion is undeniable, with M2 money supply surpassing $96 trillion, and institutional backing for digital assets remains steadfast. The continuous growth of major traditional financial institutions, the structural expansion of the ETF market, and the gradual institutional adoption of stablecoins—these medium-to-long-term growth drivers remain firmly in place.
Throughout US history, government shutdowns have invariably concluded with bipartisan consensus, and this instance will be no exception—it is merely a matter of time. The fundamental direction of the Federal Reserve’s rate cuts remains unchanged; only the pace is subject to ongoing observation. Most importantly, Bitcoin’s core fundamentals have not shifted in the slightest. The network operates stably, and institutional investors continue their strategic accumulation.
Considering these enduring factors, the current market adjustment stems from the clearing of over-leveraged positions and temporary macroeconomic uncertainties—factors insufficient to derail the long-term upward trend.
This content is an authorized excerpt and reproduction from PANews, sourced from Tiger Research. Original link: PANews Article.
Disclaimer: This article provides market information only. All content and opinions are for reference purposes only and do not constitute investment advice. They do not represent the views or positions of BlockTempo. Investors should make their own decisions and trades. The authors and BlockTempo will not bear any responsibility for direct or indirect losses incurred by investors’ transactions.
