Fidelity Analyzes Bitcoin's Growth Cycle: What Lies Ahead?

Bitcoin has shown distinct growth patterns over the years, often assisting analysts in forecasting future trends. Recently, Jurrien Timmer, the Director of Global Macro at Fidelity, shared a new analysis focused on Bitcoin’s wave development model.

Key Takeaways

Jurrien Timmer from Fidelity analyzes Bitcoin's wave development model, indicating a current fifth growth cycle possibly peaking at around $151,360.
A potential support level for Bitcoin is suggested at approximately $80,554, with insights pointing towards a sixth growth wave.
While the near-term outlook is positive due to favorable investor sentiment, caution is advised given historical trends during midterm election years, which typically show Bitcoin underperforming.

The mixed analyses indicate that 2026 could be a dynamic year for investors, especially as institutional adoption of Bitcoin has been on the rise over the past two years following the approval of Bitcoin ETFs.

While experts maintain an optimistic outlook for next year, they urge caution in their forecasts.

Assessing Bitcoin’s Sixth Growth Wave

In a detailed report, Jurrien Timmer pointed out that Bitcoin’s wave development model suggests each new growth cycle tends to expand with less intensity but lasts longer. Analyzing historical data dating back to 2010, Timmer indicated that Bitcoin is currently in its fifth growth wave, which commenced after hitting a low of $16,603 in 2022 and could peak at approximately $151,360.

“It’s challenging to ascertain in real time whether we are entering a new downturn. However, the evolving wave structure of Bitcoin’s maturing network curve demonstrates that the latest bull market, starting from around $16,000 in 2022, appears quite developed,” said Jurrien Timmer.

In the near term, Timmer remains hopeful about Bitcoin's performance as 2023 draws to a close, driven by a positive shift in investor sentiment, largely due to the Federal Reserve's monetary easing policies.

Looking further ahead, he hinted at the possibility of a sixth growth wave. This model incorporates linear projections based on data from the previous five growth waves. The insights from this model indicate that Bitcoin’s Descending Slope chart suggests potential support at around $80,554, although it does not specify the exact bottom point to initiate Wave 6.

These projections suggest a promising start to 2026, as Bitcoin’s current fifth wave has yet to conclude. In a similar vein, Jimmy Xue, COO and Co-founder of Axis, echoed this outlook, noting that the impacts of the Fed's rate cuts are expected to surface shortly.

“We anticipate a phase of stabilization and fluctuation instead of an immediate V-shaped recovery. The market needs time to absorb the recent volatility. Still, the medium-term outlook appears bullish for Q1 2026 as the rate cuts eventually enhance global liquidity and institutional allocations realign in January,” stated Jimmy Xue in an interview with BeInCrypto.

Conversely, some indicators suggest a more cautious outlook. The year 2026 aligns with the midterm elections in the U.S., a period during which Bitcoin has historically shown weaker performance, with drawdowns between 60% and 75%.