Market volatility intensifies: Why does Bitcoin still have a chance to reach $200,000 in Q4?

Original Title: "Q4 2025 Bitcoin Valuation Report"

Original Source: Tiger Research

Note from Rhythm: This article was first published on October 27, 2025. On November 6, Tiger Research published again, stating that despite increased market volatility, the $200,000 target price remains unchanged. The reasons are as follows:

· The U.S. government shutdown has lasted for 35 days, causing short-term pressure—the U.S. Treasury TGA liquidity is frozen, and Polymarket predicts a 73% probability that the shutdown will last beyond mid-November.

· Record-breaking forced liquidation events have hit market sentiment—on October 10 (UTC+8), forced liquidations reached $20 billions, affecting 1.6 million traders. The market cleared excessive leverage, triggering a temporary pullback.

· Fundamentals remain solid, with a long-term upward trend unchanged—global liquidity is expanding, M2 broad money supply exceeds $96 trillions, institutional investors maintain strategic buying, and the bitcoin target price remains at $200,000. The following is the original content:

Key Points

· Institutional investors continue to increase holdings amid volatility—ETF net inflows remained stable in Q3, MSTR increased its holdings by 388 bitcoins in a single month, demonstrating firm long-term investment conviction;

· Overheated but not extreme—The MVRV-Z index is at 2.31, indicating high valuation but not at extreme levels. The clearing of leveraged funds has removed short-term traders, creating room for the next rally;

· Global liquidity environment continues to improve—Broad money supply (M2) has surpassed $96 trillions, reaching a record high. Expectations for Federal Reserve rate cuts are rising, with 1-2 more cuts expected within the year.

Institutional Investors Buy Amid US-China Trade Uncertainty

In the third quarter of 2025, the bitcoin market slowed from the strong rally in Q2 (up 28% quarter-on-quarter) and entered a volatile sideways phase (up 1% quarter-on-quarter).

On October 6 (UTC+8), bitcoin hit a new all-time high of $126,210, but the Trump administration once again imposed trade pressure on China, causing bitcoin's price to pull back 18% to $104,000, with significantly increased volatility. According to Volmex Finance's Bitcoin Volatility Index (BVIV), as institutional investors steadily increased their holdings, bitcoin volatility narrowed from March to September, but surged 41% after September, intensifying market uncertainty (Chart 1).

Driven by renewed US-China trade friction and Trump's tough rhetoric, this pullback appears temporary. Institutional strategic accumulation, led by Strategy Inc. (MSTR), is actually accelerating. The macro environment is also contributing. Global broad money supply (M2) has surpassed $96 trillions, reaching a record high, while the Federal Reserve cut rates by 25 basis points to 4.00%-4.25% on September 17. The Fed signaled 1-2 more rate cuts this year, and a stable labor market combined with economic recovery has created favorable conditions for risk assets.

Institutional capital inflows remain strong. In Q3, spot bitcoin ETF net inflows reached $7.8 billions. Although lower than Q2's $12.4 billions, continued net inflows throughout Q3 confirm stable institutional buying. This momentum has continued into Q4—with $3.2 billions recorded in just the first week of October, setting a new weekly inflow record for 2025. This indicates that institutional investors view price pullbacks as strategic entry opportunities. Strategy continued to buy during the market pullback, purchasing 220 bitcoins on October 13 (UTC+8) and 168 bitcoins on October 20 (UTC+8), totaling 388 bitcoins in one week. This shows that regardless of short-term volatility, institutional investors firmly believe in bitcoin's long-term value.

On-chain Data Signals Overheating, Fundamentals Unchanged

On-chain analysis reveals some signs of overheating, but valuations are not yet concerning. The MVRV-Z indicator (market value to realized value ratio) is currently in the overheated zone at 2.31, but has stabilized compared to the extreme valuation range seen in July-August (Chart 2).

The Net Unrealized Profit/Loss (NUPL) also shows an overheated zone, but has eased compared to the high unrealized profit situation in Q2 (Chart 3). The adjusted Spent Output Profit Ratio (aSOPR), reflecting realized profits and losses of investors, is very close to the equilibrium value of 1.03, indicating no cause for concern (Chart 4).

The number of bitcoin transactions and active users remained at similar levels to the previous quarter, indicating that network growth momentum has temporarily slowed (Chart 5). Meanwhile, total transaction volume is on the rise. Fewer transactions but higher volume means larger funds are being moved in fewer trades, suggesting an increase in large-scale capital flows.

However, we cannot simply regard the increase in transaction volume as a positive signal. Recently, there has been an increase in funds flowing into centralized exchanges, which usually indicates that holders are preparing to sell (Chart 6). In the absence of improvement in fundamentals such as transaction count and active users, the rise in transaction volume more likely reflects short-term capital flows and selling pressure in a high-volatility environment, rather than a genuine expansion of demand.

The October 11 Crash Proves the Market Has Shifted to Institutional Dominance

The crash on centralized exchanges on October 11 (UTC+8) (a 14% drop) proves that the bitcoin market has shifted from retail-dominated to institution-dominated.

The key point is that the market reaction was completely different from the past. In a similar environment at the end of 2021, retail-driven panic spread through the market, followed by a crash. This time, the pullback was limited. After large-scale liquidations, institutional investors continued to buy, indicating that institutional investors are determined to defend the market's downside. In addition, institutions seem to view this as a healthy consolidation, helping to eliminate excessive speculative demand.

In the short term, consecutive sell-offs will lower the average purchase price of retail investors and increase psychological pressure, potentially intensifying volatility due to weakened market sentiment. But if institutional investors continue to enter during the consolidation period, this pullback may lay the foundation for the next rally.

Target Price Raised to $200,000

Using our TVM method for Q3 analysis, we arrive at a neutral benchmark price of $154,000, up 14% from Q2's $135,000. On this basis, we applied a -2% fundamental adjustment and a +35% macro adjustment, resulting in a target price of $200,000.

The -2% fundamental adjustment reflects the temporary slowdown in network activity and increased deposits in centralized exchanges, indicating short-term weakness. The macro adjustment remains at 35%. Global liquidity expansion and continued institutional capital inflows, along with the Federal Reserve's dovish stance, provide a strong catalyst for a Q4 rally.

Short-term pullbacks may stem from signs of overheating, but this is a healthy consolidation rather than a change in trend or market perception. The benchmark price continues to rise, indicating that bitcoin's intrinsic value is steadily increasing. Despite temporary weakness, the medium- and long-term outlook remains solidly bullish.