Bitcoin Navigates the Ninety-Eight Thousand Resistance: Policy Catalysts and Liquidity Momentum Point to $185,500

Bitcoin currently trades at $87.65K, down 1.55% over the past 24 hours, as markets consolidate around critical technical levels. The latest analysis suggests that while short-term volatility persists, the medium-to-long-term structure remains constructive. Our revised assessment maintains a bullish outlook with a target price of $185,500 for Q1 2026, implying approximately 100% upside potential from current levels. This target reflects three converging forces: accommodative Fed policy, progressing regulatory frameworks, and sustained institutional capital accumulation.

Fed Easing and Regulatory Progress: The Macro-Policy Foundation

The Federal Reserve’s monetary policy trajectory continues to support risk assets. From September through December 2025, the Fed executed three consecutive rate cuts totaling 75 basis points, lowering the target range to 3.50%-3.75%. December’s dot plot indicates further rate declines, with projections pointing to 3.4% by year-end 2026. While aggressive 50+ basis-point cuts are unlikely in the near term, the transition of Fed leadership—with Powell’s term concluding in May 2026—could usher in a more dovish monetary regime under the Trump administration.

Beyond monetary easing, regulatory catalysts are crystallizing. The CLARITY Act, having passed the House, represents a watershed moment for institutional participation. This legislation clarifies the jurisdictional split between the SEC and CFTC, explicitly authorizing banks to offer digital asset custody and staking services. More significantly, it grants the CFTC direct regulatory authority over spot digital commodities markets, establishing a legal framework that has long deterred traditional financial institutions. The Senate Banking Committee is scheduled to review the legislation on January 15th. If enacted, this regulatory clarity could trigger a wave of institutional adoption previously held in abeyance.

Breaking Through Ninety-Eight Thousand: On-Chain Metrics Signal Equilibrium and Opportunity

Technical analysis reveals that ninety-eight thousand represents more than a simple price level—it embodies the average cost basis of short-term holders and serves as a critical psychological and technical resistance point. During November 2025’s correction, aggressive dip-buying accumulated around $84,000, establishing a durable support floor. Bitcoin has subsequently broken above this range, and the ninety-eight thousand level now constitutes the immediate overhead resistance to a sustained rally.

On-chain indicators have transitioned from distress to equilibrium. The MVRV-Z score stands at 1.25, suggesting fair valuation rather than undervaluation. The NUPL (Net Unrealized Profit/Loss) metric at 0.39 and the aSOPR (Average Spent Output Profit Ratio) at 1.00 confirm this neutral positioning. Critically, this shift indicates that panic-driven cascades have become less likely, but it also means explosive rallies fueled by retail fear-of-missing-out have similarly diminished. The market structure—increasingly dominated by institutional and long-term holders—exhibits more gradual rebalancing patterns than in prior cycles, reducing the amplitude of sell-offs and stabilizing price floors.

Institutional Accumulation and M2 Expansion: Capital Flows Sustain Upside Potential

Despite favorable macro conditions, spot Bitcoin ETF flows have disappointed recently. November and December witnessed $4.57 billion in outflows—the largest redemption period since the products’ inception. Annual net inflows reached $21.4 billion, a 39% decline compared to 2024’s $35.2 billion. While January rebalancing triggered modest inflows, the sustainability of this bounce remains uncertain.

However, corporate treasuries continue aggressive accumulation. MicroStrategy leads this charge, holding 673,783 BTC—approximately 3.2% of total supply. Companies like Metaplanet and Mara persist in their acquisition strategies, despite ETF headwinds. This divergence—institutional ETF redemptions offset by strategic corporate hoarding—suggests capital is rotating toward long-term conviction holders rather than retreating entirely from the asset class.

Global M2 money supply hit record levels in Q4 2024 and continues expanding. Historically, Bitcoin exhibits lead-indicator properties relative to liquidity cycles, typically advancing before M2 peaks and consolidating during the peak phase. Current trajectories point to continued expansion, particularly given potential Trump administration policies favoring fiscal stimulus. Should equity valuations appear overextended, capital rotation into Bitcoin could accelerate, providing additional tailwinds.

Valuation Framework: TVM Model and Macro Adjustments

We employ a Time Value of Money (TVM) framework to derive Bitcoin’s intrinsic value. The neutral baseline valuation for Q1 2026 is $145,000, slightly below our October report’s $154,000 estimate, reflecting recent price volatility and market repricing. Applied adjustments are conservative:

• Fundamental adjustment: 0% (revised from -2%). Network activity exhibits marginal changes, but renewed market focus on BTCFi ecosystems has offset previous bearish signals.
• Macro adjustment: +25% (revised downward from +35%). While Fed easing and M2 expansion remain constructive, we account for slowing institutional ETF inflows, Fed leadership transition uncertainty, and geopolitical tail risks.

Multiplying the baseline $145,000 by the combined adjustment factor (1.00 × 1.25) yields our revised target price of $185,500. This adjustment downward should not be misinterpreted as bearish sentiment. Even at the reduced adjustment level, the model indicates approximately 100% potential upside from current prices. The baseline reduction primarily reflects recent consolidation, while Bitcoin’s intrinsic value trajectory over the medium-to-long term remains ascendant.

Outlook: The Path Beyond Ninety-Eight Thousand

The recent pullback represents healthy rebalancing rather than structural deterioration. Several factors reinforce this assessment: (1) Fed policy remains accommodative, with rate-cut expectations anchored; (2) CLARITY Act passage would eliminate a major institutional adoption barrier; (3) on-chain metrics have stabilized at equilibrium, reducing panic-driven volatility; (4) corporate treasuries maintain relentless accumulation; and (5) global liquidity continues expanding.

Breaking decisively above the ninety-eight thousand resistance would affirm the technical and macro setup, opening the path toward our $185,500 target. While short-term volatility is inevitable—particularly around CLARITY Act developments and Fed communications—the structural backdrop supports continued appreciation. The combination of policy catalysts, liquidity expansion, and institutional participation creates a compelling foundation for Bitcoin’s Q1 2026 valuation target.