Fidelity says Bitcoin bear market may not be over despite August rally

Bitcoin posted its strongest monthly gain since November 2024 in August, rising more than 25% in the third week alone. Fidelity’s fourth‑quarter crypto market outlook highlighted the surge but cautioned that the rally does not prove the current bear market has ended.

August performance and broader market moves

In the same period, Ethereum gained 34.1% and Solana advanced 28%, marking their strongest positive months since late 2025. The gains followed a relatively subdued market from June through mid‑August.

Fidelity’s assessment of the rally

Fidelity warned the rally could be the start of a sustained recovery or a temporary bounce within a continuing bear market. The firm noted a shift from low volatility (June‑mid‑August) to a sharp upward expansion, which may indicate seller exhaustion.

Historical cycle considerations

Some investors look to November 2026 as a potential bottom based on Bitcoin’s four‑year cycle, but Fidelity stressed that cycles are not precise and cannot reliably pinpoint turning points. The firm said Bitcoin may have already hit its low in July, yet further declines remain possible.

Adoption trends amid price weakness

Despite price declines, digital‑asset adoption stayed resilient. Stablecoin transaction volume, tokenized real‑world assets and institutional participation continued to grow. Institutional fund flows showed mixed patterns, with Ethereum funds attracting more capital than Bitcoin funds in July, while Bitcoin ETF demand recovered in August.

Regulatory backdrop

The U.S. regulatory calendar could influence the market. The CLARITY Act, pending in the Senate, faces a procedural vote on September 15 and a comment period for the SEC’s Regulation Crypto Assets proposal that runs until October 20, 2026. Both initiatives could reshape digital‑asset oversight and fundraising.

Outlook

Fidelity identified institutional adoption, regulatory developments, monetary policy and new blockchain use cases as factors that could support a future bull market, but none confirm that the bear market has ended. Price action and adoption data will continue to test the durability of the August recovery.