Bitcoin and the crypto market remained in a rut throughout much of Q3. In late August, however, prices surged, with bitcoin posting its largest green month since November 2024.
Some investors believe the bear market is over, while others are watching for a potential bottom to form before the end of the year. Aside from the recent jump in price, what else might be causing this cautious optimism? And what else should crypto investors watch for in Q4?
4-year cycles in focus
For most of its history, bitcoin has formed bear market bottoms (and bull market tops) roughly 4 years apart. Based on this logic, and given the fact that the last bear market bottom occurred in November 2022, the next bear market bottom could be some time in November 2026 if these cycles continue to play out. And as bitcoin goes, ethereum and the total altcoin market cap tends to follow.
Of course, investors should note that this cycle isn’t guaranteed to repeat. Given bitcoin’s recent performance, the bottom could already have occurred in July. It could also drop again to make another new low in November or later. In general, investors should remember that the cycles have historically not been precisely 4 years long, so they aren’t reliable for timing the market (and timing the market in general is exceedingly difficult).
But for those who believe the total crypto market cap will continue going up over time, the cycle concept could still be an effective argument for holding investments long-term. "The more important point for investors is that adoption of digital assets has happened in waves, which can perpetuate cycles,” says Chris Kuiper, Vice President of Research at Fidelity Digital Assets®. “In light of this, having a long-term perspective and holding period is what has historically been the most beneficial for investors."
Which other catalysts might help end the bear market?
Historically, several factors have helped contribute to new bull markets. The list includes the 4-year cycles continuing to play out, new crypto-friendly regulations, changes in government monetary policy, an unexpectedly popular crypto use case catching on, and growing institutional adoption.
Currently, there’s an additional factor to watch: price volatility.
Like with many other assets, bitcoin’s previous bear markets have ended with a period of low volatility, followed by a period of high volatility where price expands upwards.
“From June to mid-August, we saw a period of relatively low volatility for digital assets, where it appeared sellers had been exhausted,” says Kuiper. “During this time, Fidelity Digital Assets’ analysis showed that the prices of digital assets like bitcoin were at the low or "value" end of the spectrum, at least compared to historical data.”
Then, in late August, bitcoin entered a period of high volatility, where price jumped over 25% during the third week of the month alone. During the same timeframe, ethereum and Solana’s prices climbed 34.1% and 28%, respectively. While this is not a guarantee that the bear market is over, it’s one possibility to keep in mind, given how price has historically acted.
“Recent events that would have likely been bear market catalysts, such as a recent hardware wallet security incident or the stalling of the CLARITY Act, have not moved prices lower,” Kuiper adds. “This could further strengthen the case that cryptocurrencies may be near the bottom and are now looking for the next positive catalyst.”
Crypto adoption begins to recouple with price
Despite the negative sentiment from the broader market over the last few months, adoption of digital assets continued to grow. For example, in early July, crypto asset manager Bitwise Investments reported that the total transaction volume of stablecoins is now 2.3 times higher than that of Visa.1 Also in July, Metamask—the largest self-custody wallet provider—reported that the RWA market has grown faster in 2026 than in any other year (RWA is short for “real-world assets,” where ownership of real estate, government bonds, commodities, and other traditional assets are transferred on blockchains).2
However, while activity throughout certain crypto sectors was increasing during this time, the total crypto market cap remained firmly in a bear market. In other words, adoption and price seemed to decouple. But with the push higher in late August, the 2 factors could be becoming more correlated again.
Something similar happened during the 2021-2022 bear market, when adoption continued to grow overall while digital asset prices slumped. When a new bull market began in late 2022, adoption and price began to move more closely in-line with each other.
"Fidelity Digital Assets likes to think of adoption metrics as the 'fundamentals' of the network," says Kuiper. "The fact that many of these fundamentals remained resilient or were even growing during the last few months tells us that the value proposition of these networks hadn’t changed or gone away, even if price wasn’t following at the time."
What’s the latest in digital asset policy?
The industry is still waiting for action on the CLARITY Act, a bill that would establish a more comprehensive regulatory framework for digital assets in the United States. One of its goals is to clarify which federal regulators are responsible for which kinds of digital assets.
Proponents argue the legislation would provide greater regulatory certainty and support continued innovation in the U.S. digital asset ecosystem. The bill has passed the House but remains under consideration in the Senate, where its ultimate path and timing remain uncertain.
Separately, last week the SEC proposed Regulation Crypto Assets, a new regulatory framework addressing when certain earlier-stage crypto asset offerings may qualify for exemptions from securities registration requirements. While the proposal is subject to public comment and is not yet final, it represents an important step in the agency's broader effort to develop a more tailored regulatory approach for digital assets.