Bitcoin recorded its strongest monthly gain since November 2024 during August, but Fidelity said the advance does not prove that the latest crypto bear market has ended.
In its fourth-quarter crypto market outlook, Fidelity said Bitcoin, Ethereum and several altcoins recorded their strongest positive months since late 2025. Bitcoin gained more than 25% during the third week of August alone.
Ethereum rose 34.1% during the same period, while Solana advanced 28%, according to Fidelity. The gains followed relatively subdued market activity from June through the middle of August.
However, Fidelity warned that the rally could represent either the beginning of a sustained recovery or a temporary move within a continuing bear market.
Bitcoin bear market faces a November cycle test
Some investors are watching November 2026 as a possible market-bottom period based on Bitcoin’s historical four-year cycle. Bitcoin’s previous major bear-market bottom occurred in November 2022.
Applying the same approximate interval would place the next potential bottom around November 2026. Fidelity stressed that historical cycles have never followed precise four-year schedules and cannot reliably identify market turning points.
The firm said Bitcoin may have already reached its low in July. It could also decline again and establish another low during November or later.
“Despite the recent push higher in price, there is no guarantee the bear market is over,” Fidelity said.
Chris Kuiper, vice president of research at Fidelity Digital Assets, said adoption has historically occurred in waves that can help sustain market cycles. He argued that a longer holding period has generally proved more useful than attempting to time exact bottoms.
That view remains an observation based on historical performance. It does not establish that Bitcoin will repeat an earlier cycle or continue appreciating.
Volatility shift offers a possible recovery signal
Fidelity identified Bitcoin’s transition from lower volatility to a sharp upward expansion as one possible sign that sellers were becoming exhausted.
Kuiper said digital assets experienced relatively low volatility between June and mid-August. Fidelity’s analysis placed assets such as Bitcoin near the lower, or “value,” end of their historical ranges during that period.
The subsequent rally resembled volatility patterns seen near some previous bear-market endings. Bitcoin’s rapid advance above $80,000 was followed by a retreat toward $79,250, as crypto.news reported in its analysis of overbought conditions increasing short-term pullback risks.
That technical reading did not establish a new bear market. It showed that Bitcoin had risen rapidly enough to increase the probability of consolidation after the advance.
Kuiper also noted that developments which might previously have pressured prices, including a hardware-wallet security incident and delays surrounding the CLARITY Act, did not reverse the August rally.
This resilience “could further strengthen the case” that cryptocurrencies are near a bottom, Kuiper said, while stopping short of confirming one.
Adoption continued while cryptocurrency prices weakened
Fidelity said digital-asset adoption remained resilient during the earlier market decline. Stablecoin transaction volume, tokenized real-world assets and institutional participation continued growing even as the broader market capitalization weakened.
The firm described network adoption measures as comparable to fundamental indicators used when evaluating traditional businesses. Rising transaction activity can demonstrate continued use, although it does not guarantee higher token prices.
Institutional investment products also showed mixed allocation patterns before Bitcoin’s August rally. In related coverage, crypto.news reported that Ethereum funds attracted more capital than Bitcoin funds during July.
Bitcoin exchange-traded fund demand subsequently recovered during August. Fidelity listed stronger institutional adoption among the factors that could support another bull market, alongside regulatory changes, monetary policy and new blockchain use cases.
U.S. policy decisions remain key fourth-quarter catalysts
The U.S. regulatory calendar could provide two major tests during the fourth quarter. The CLARITY Act remains pending in the Senate after the Senate Banking Committee advanced it by a bipartisan 15–9 vote in May.
A procedural vote is scheduled for Sept. 15 and requires 60 votes to advance the bill toward debate. The legislation would divide elements of digital-asset oversight between the SEC and CFTC. However, passage remains uncertain, and further amendments could require additional House consideration.
As crypto.news reported, the bill now faces a tight congressional timetable before the midterm elections.
Separately, the SEC proposed Regulation Crypto Assets on Aug. 18. The proposed framework would create two securities-registration exemptions for qualifying crypto investment contracts.
The SEC’s formal proposal would allow eligible offerings of up to $5 million over four years or $75 million during a 12-month period, subject to specific conditions. Public comments are due by Oct. 20.
Crypto.news previously examined how the proposed exemptions would reshape token fundraising. The proposal is not final and may change following public feedback.
These policy proceedings, monetary conditions and institutional participation could shape Bitcoin’s fourth-quarter direction. None provides confirmation that the bear market has ended, leaving price action and adoption data as continuing tests of the August recovery.