Fidelity Flags Historic Low for Bitcoin 'Yardstick', Predicts Possible October Bottom

Fidelity's Q3 Signals Report has identified a possible bitcoin bottom in October. The report suggests that BTC may be trading at a substantial discount relative to its network's energy cost, with the 'Yardstick' metric hovering near historic lows.

The Yardstick compares market capitalization to network hashrate via a normalized Z-score, indicating undervaluation when values fall below -1 standard deviation. Currently, this metric is in the undervalued zone for 83% of the past 92 days.

Bitcoin miners have managed energy costs more efficiently, contributing to lower price volatility and a more resilient market. Historically, such conditions have aligned with accumulation phases and relative bottoms, lasting almost 300 days in previous cycles.

Joao Wedson, founder of Alphractal, noted that BTC's long-term holder to short-term holder realized cap ratio has reached 3.9, approaching the level above 4 that preceded major price bottoms in previous cycles.