Fidelity Flags October and Bitcoin Bottom as 'Yardstick' Hits Historic Lows

Fidelity’s Q3 Signals Report, released on Tuesday, highlighted that Bitcoin’s ‘Yardstick’ metric is hovering near historic lows while sentiment indicators approach capitulation territory. The report notes that Bitcoin is currently trading around 50% below its all-time high, which is shallower compared to previous bear market bottoms.

The Yardstick metric compares Bitcoin’s market capitalization to network hashrate via a normalized Z-score, with values below -1 standard deviation indicating undervaluation. It measures whether the asset is trading at a fair price relative to the ‘energy cost’ of its security. Low or negative readings signal undervaluation, while high readings indicate overvaluation. The metric has been firmly in the ‘undervalued’ zone for 83% of the past 92 days.

Bitcoin miners have faced increasing pressure as prices have fallen, yet total hash rate has only dropped around 22% from its peak, highlighting miner resilience. ‘As a result, the Yardstick is currently hovering near historic lows. This suggests BTC may be trading at a substantial discount relative to the energy securing the network,’ the report said.

Fidelity suggested that this phenomenon may be due to lower price volatility this cycle and a more mature mining industry with efficient energy cost management. Historically, this undervalued zone has aligned with accumulation phases and relative bottoms, which lasted almost 300 days in previous cycles. ‘This bear market has experienced 203 days to date, suggesting October 2026 may represent a key timeframe for investors focused on cycle dynamics.’

Joao Wedson, founder of Alphractal, noted that Bitcoin’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. ‘This does not guarantee that the exact bottom is already in, but it shows that the market is approaching a zone previously associated with major cycle bottoms.’

Bitcoin has retreated by 5.5% from its five-week high of $67,000 on July 21, falling to just under $63,000 on Tuesday. The asset has made a minor recovery to tap $64,000 three times over the past 12 hours, failing to break resistance there. Swissblock reported that Bitcoin’s ‘reconstruction phase’ has hit another obstacle as momentum has escaped its most extreme negative readings but has now stalled, with buying participation insufficient to carry price forward.

Source: https://cryptopotato.com/fidelity-flags-october-and-bitcoin-bottom-as-yardstick-hits-historic-lows/