Fidelity Warns Bitcoin May Be Near Bottom, Cites Four-Year Cycle and Institutional Trends

Fidelity's latest crypto market outlook suggests that Bitcoin may be nearing a bottom. The firm points to four-year cycles, rising volatility, changes in regulatory environments, and institutional adoption trends as key variables in the fourth quarter.

The four-year cycle is a historical pattern observed by Fidelity, where bull-market peaks and bear-market troughs occur roughly every four years. If this pattern repeats, the next major low after November 2022 could come around November 2026. However, Fidelity cautions against using this cycle as a simple market-timing tool.

The recent sharp rebound has fueled expectations that the bear market may be ending, but it is still too early to declare a definitive bottom. Bitcoin's price jumped more than 25% in the third week of August alone, while Ether rose 34.1% and Solana gained 28%. Prices broke sharply higher after volatility eased from June through mid-August.

Fidelity also points to a weaker market reaction to negative developments, such as a hardware-wallet security incident and delays in advancing the CLARITY Act, a US crypto market-structure bill. This may signal that selling pressure has eased substantially.