Fidelity Digital Assets Eyes October for Potential Bitcoin Bottom as On-Chain Metrics Hit Lows

Analysis from Fidelity Digital Assets suggests Bitcoin's current down cycle could reach a bottom around October 2026, based on key on-chain valuation metrics that have fallen to historic lows. The firm's research points to a significant divergence between market sentiment and the network's underlying fundamentals.

Key Metrics Signal Undervaluation

Fidelity's assessment is based on several on-chain indicators suggesting the market is in a deep accumulation phase. According to the report, Bitcoin's price has traded at a notable discount to miners' energy costs for 76 of the past 92 days, an extended period historically associated with market bottoms.

One proprietary metric cited, the "Yardstick," which uses a Z-score to standardize network value against processing speed and energy consumption, indicates significant undervaluation. The report also notes that while previous accumulation phases lasted around 300 days, the current bear market has persisted for 203 days.

Investor Sentiment Nears Capitulation

Sentiment indicators are reportedly approaching a "capitulation zone." The gap between the realized capital of long-term and short-term holders stands at 3.9 points, nearing a 4.0 threshold often observed at market troughs. This suggests that short-term speculators have largely exited the market.

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Data from the platform Alphractal reportedly supports this view, showing capital flowing toward long-term investors. Alphractal founder Joao Wedson stated that the market is in a "deep accumulation phase" and is approaching a critical support area.

Price Action and Network Resilience

Despite recent price weakness, the Bitcoin network has demonstrated resilience. Even amid financial pressure on mining operations, the network's peak computing power has only declined by a modest 22%. Price volatility has also been lower than in previous cycles, indicating a more mature market structure.

Bitcoin's price was recently down 5.5% from its five-week high of $67,000 on July 21, briefly dipping below $63,000 on Tuesday. Analytics firm Swissblock noted that while the price trend is stabilizing, buying momentum has stalled, with the cryptocurrency failing three times to breach the $64,000 resistance level in a 12-hour span.