Original authors: Daniel Kim, Ryan Yoon, Jay Jo; Source: Tiger Research

Amid heightened market volatility, we maintain our $200,000 price target. This report assesses the nature of the current pullback and the sustainability of the long-term fundamentals.

Key points summary

• The US government shutdown has lasted 35 days, causing short-term pressure —the US Treasury's TGA liquidity is frozen, and Polymarket predicts there is a 73% chance the shutdown will continue beyond mid-November.
• Record-breaking forced liquidations dampened market sentiment – the forced liquidations on October 10th amounted to $20 billion, affecting 1.6 million traders, clearing out excessive leverage and triggering a temporary pullback in the market.
• The fundamentals remain solid, and the long-term upward trend remains unchanged – global liquidity is expanding, with M2 broad money supply exceeding $96 trillion, institutional investors are maintaining strategic buying, and the target price for Bitcoin remains unchanged at $200,000.

Bitcoin enters a correction phase

After hitting an all-time high of $126,200 on October 6, Bitcoin has fallen by about 20% over the past month and is currently consolidating around $100,000. The total market capitalization of cryptocurrencies has also fallen by 22%, from $4.35 trillion in early October to $3.3 trillion currently, putting downward pressure on both Bitcoin and altcoins.

This decline was not caused by any negative news related to cryptocurrencies. The US government shutdown, the Federal Reserve Chairman's change of stance, and declining leverage are the main reasons for the current weakness.

US federal government shutdown crisis

The US federal government shutdown, which began on October 1st, has lasted for 35 days and is the primary reason for the current market correction. This crisis has led to a halt in government spending and created a policy vacuum at major financial regulators, including the Securities and Exchange Commission (SEC), restricting the flow of macro liquidity into the cryptocurrency market. The freeze on payments in the US Treasury General Account (TGA) has particularly hampered liquidity that should have entered the capital markets. Typically, when the TGA stops making payments, the government stops spending but continues to collect taxes and issue bonds, thus withdrawing liquidity from the system.

Although government shutdowns have historically ended in relatively mild terms, Republicans and Democrats remain deadlocked in budget negotiations, with Polymarket data showing a 73% chance of this situation continuing beyond mid-November, raising concerns that the recent market correction may persist.

Powell's hawkish remarks

Federal Reserve Chairman Jerome Powell stated after the Federal Open Market Committee (FOMC) meeting on October 29 that a December rate cut is "far from a certainty." This statement reduced the probability of a December rate cut from 95% to 68%, lowered expectations for further monetary easing, and exacerbated liquidity tensions in the cryptocurrency market.

The aftermath of the liquidation on October 10

President Trump's tariff threats against China triggered a chain reaction on October 10th, 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 that $45 million worth of Bitcoin has been transferred from wallets allegedly linked to Barron Trump have further dampened investor confidence. However, this adjustment reduced highly leveraged positions, curbing speculative activity in the market to some extent.

The correction in the artificial intelligence sector has spread.

On November 4th, the public stock market weakened due to investor concerns about the valuations of artificial intelligence-related companies. Despite strong earnings from Palantir, the company's stock price fell 7.94% in after-hours trading after Michael Burry of Scion Asset Management disclosed his short position . This correction in the AI sector also impacted the cryptocurrency market. As high-growth stocks were sold off in the public stock market, the cryptocurrency market, due to its higher volatility, faced even greater selling pressure.

Fundamentals unchanged

We maintain our target price of $200,000 for Bitcoin. While current market uncertainty appears high, we need to focus on the unchanging certainties. Global liquidity expansion is evident, with M2 money supply exceeding $96 trillion, and institutional support for digital assets remains robust. Continued growth among major traditional financial companies, structural expansion in the ETF market, and the gradual adoption of stablecoins by institutions—these medium- to long-term growth drivers remain unchanged.

Throughout US history, government shutdowns have always ended with a bipartisan consensus, and this time is no exception—it's only a matter of time. The Federal Reserve's direction on interest rate cuts remains unchanged; only the pace remains to be seen. Most importantly, Bitcoin's fundamentals have not changed at all. The network is operating stably, and institutional investors continue to strategically increase their holdings.

When we consider these constant factors, the current correction stems from excessive leverage liquidation and temporary macroeconomic uncertainty—which is not enough to break the long-term upward trend .

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