“BTC’s Yardstick is hovering near historic lows, while several sentiment indicators are approaching capitulation territory,” stated Fidelity in its Q3 Signals Report on Tuesday.

However, bitcoin is currently trading around 50% below its all-time high, which is still shallow compared to previous bear market bottoms.

October Eyed as Key Cycle Timeframe

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 essentially measures whether the asset is trading at a fair price relative to the “energy cost” of its security. Low or negative readings signal undervaluation or cheap bitcoin, while high readings signal overvaluation and expensive BTC. 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 the total hash rate has only fallen 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.”

This has likely happened because this cycle has lower price volatility than previous ones, and the mining industry has matured, with miners now managing energy costs more efficiently, said Fidelity.

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, said, “Bitcoin is approaching a historically important zone.” BTC’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.

The metric shows realized capital increasingly concentrated among long-term holders with strong conviction, while short-term speculative participation remains weak, indicating an advanced accumulation phase.

“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.”

BTC Price Outlook

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. However, 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 on Wednesday that Bitcoin’s “reconstruction phase” has hit another obstacle as momentum has escaped its most extreme negative readings but has now stalled.

“The structure continues to stabilize, but buying participation has not expanded enough to carry price forward,” they said.

Source: CryptoPotato