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- Fidelity said Bitcoin’s four-year cycle, rising volatility, changes in the regulatory environment, and institutional adoption trends will be the key variables in the fourth quarter.
- Fidelity said it is still too early to declare a definitive bottom for Bitcoin, even while using its four-year cycle as a reference point, because the market may have already bottomed in July or could still make another low after November.
- Fidelity said stablecoin transactions, real-world asset tokenization (RWA), greater regulatory clarity, shifts in monetary policy, and faster institutional adoption could support fundamentals and serve as catalysts for the next rally, adding that investors should watch fourth-quarter price action, policy progress, and adoption metrics together.
Forecast Trend Report by Period
Fidelity has identified Bitcoin’s four-year cycle, rising volatility, shifts in the regulatory environment and institutional adoption trends as the key variables for the digital-asset market in the fourth quarter. The recent sharp rebound has fueled expectations that the bear market may be ending, but the firm said it is still too early to declare a definitive bottom.
In its latest fourth-quarter crypto market outlook, Fidelity said Bitcoin has historically formed bull-market peaks and bear-market troughs at roughly four-year intervals. If that pattern repeats, the next major low after November 2022 could come around November 2026.
Still, Fidelity cautioned against using the four-year cycle as a simple market-timing tool. Given the recent rebound, Bitcoin may already have bottomed in July. It also remains possible that the market could set a lower low after November.
Recent price action has added support to the bottoming case. Bitcoin jumped more than 25% in the third week of August alone. Ether rose 34.1% over the same period, while Solana gained 28%.
Fidelity also highlighted that prices broke sharply higher after volatility eased from June through mid-August. In past Bitcoin bear markets, selling pressure was exhausted first, followed by a stretch of low volatility and then an expansion in upside volatility.
The firm also pointed to a weaker market reaction to negative developments than in the past. Prices did not fall further after a hardware-wallet security incident and delays in advancing the CLARITY Act, a US crypto market-structure bill. That may signal that selling pressure has eased substantially.
Market fundamentals also look stronger than prices. Fidelity said key adoption indicators, including stablecoin transactions and real-world asset tokenization, or RWA, continued to grow in recent months even as total cryptocurrency market capitalization weakened.
Chris Kuiper, vice president of research at Fidelity Digital Assets, said adoption metrics can be viewed as the fundamentals of digital-asset networks. What matters, he added, is that network usage held steady or expanded even while prices failed to keep pace.
Policy developments are also set to matter in the fourth quarter. In the US, the CLARITY Act is awaiting Senate review. The Securities and Exchange Commission has also proposed a new framework that includes exemptions from securities-registration requirements for early-stage crypto token issuance.
Fidelity said greater regulatory clarity, shifts in monetary policy and faster institutional adoption could act as catalysts for the next upswing. Still, it added that investors should assess fourth-quarter price action, policy progress and adoption metrics together rather than conclude from the recent rebound alone that the bear market is over.
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Source: en.bloomingbit.io