According to insights from Woofun AI, Fidelity Digital Assets has assessed that the downside cycle for Bitcoin could signal a bottom by October 2026. This projection is based on observations that key on-chain valuation metrics touched historic lows in the third quarter, marking a significant divergence between market sentiment and fundamental indicators, which provides a clear timeline for future price action.
The "Yardstick" metric, which uses a standardized Z-score to measure Bitcoin's network market capitalization against its processing speed and energy consumption, reveals that the current price is trading at a notable discount compared to miners' energy costs. This condition has persisted for 76 out of the last 92 days. Data compiled by Woofun AI shows that despite financial pressure on mining companies, the network's computational power has only declined by 22% from its peak. Operational efficiency has improved, and price volatility is lower than in previous cycles, demonstrating the resilience of the underlying network.
Historical comparisons indicate that previous accumulation phases saw an undervaluation period of approximately 300 days, while the current bear market has already lasted 203 days. Sentiment indicators are approaching a "capitulation zone," with the realized capital gap between long-term and short-term holders sitting at 3.9 points, inching closer to the 4.0 threshold. Data from the Alphractal platform suggests that capital is flowing toward long-term investors. Joao Wedson, founder of Alphractal, noted that the market is in a deep accumulation phase and is approaching a significant support zone.
Bitcoin's price has fallen 5.5% from its five-week high of $67,000 on July 21, and it briefly dipped below $63,000 on Tuesday. The asset made three attempts to break through the $64,000 resistance level within a 12-hour period, all of which were unsuccessful. A report from Swissblock indicates that buying momentum has stalled, and while the trend is stabilizing, the volume of activity is insufficient. Future monitoring will focus on changes in the mining industry's hashrate and the dynamics of operational costs.
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