Tiger Research: We maintain our target price of $200,000 amid market corrections

Author: Daniel Kim, Ryan Yoon, Jay Jo, Source: Tiger Research

Key Points Summary

• The U.S. government shutdown has lasted for 35 days, causing short-term pressure ------ The U.S. Treasury's TGA liquidity is frozen, and Polymarket predictions show a 73% chance that this shutdown will last until after mid-November.

• Record-breaking forced liquidation events hit market sentiment ------ The forced liquidation scale on October 10 reached $20 billion, affecting 1.6 million traders, as the market cleared excessive leverage, triggering a temporary pullback.

• Fundamentals remain solid, long-term upward trend unchanged ------ Global liquidity expansion, M2 broad money supply exceeds $96 trillion, institutional investors maintain strategic buying, and the Bitcoin target price remains at $200,000.

Bitcoin Enters Adjustment Phase

After reaching an all-time high of $126,200 on October 6, Bitcoin has dropped about 20% over the past month and is currently consolidating around $100,000. The total market capitalization of cryptocurrencies has also fallen 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 adjustment pressure.

This decline is not due to any negative news related to cryptocurrencies. The U.S. government shutdown, the shift in stance from the Federal Reserve Chairman, and the decrease in leverage are the main reasons for the current weakness.

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 freeze on payments from 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, thus 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, with Polymarket data showing a 73% chance that this situation will continue until after mid-November, raising concerns that the recent market pullback will persist.

Powell's Hawkish Remarks

Federal Reserve Chairman 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 remark 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 linked to Barron Trump, further undermining investor confidence. However, this adjustment has reduced high-leverage positions, somewhat curbing market speculation.

Adjustment in the AI Sector Spreads

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 Michael Burry of Scion Asset Management disclosing his short position. This adjustment in the AI sector has also impacted the cryptocurrency market. As the public stock market sells off high-growth stocks, the cryptocurrency market faces 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 will not change. 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 unchanged.

Throughout U.S. history, government shutdowns ultimately end 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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