Nasdaq follows four-year pattern: weakness now, opportunities in Q4

An analyst points to a recurring pattern in the Nasdaq that has repeated every four years for 54 years. The current quarter is historically the weakest of the cycle, but those who are patient can on average expect a considerable recovery afterwards.

In brief:

• Q3 of a midterm year is historically the weakest quarter, with an average return of -3.6%
• Q4 shows an average of +4.6%, followed by a period of three quarters with an average of +29.4%
• The pattern is based on 54 years of Nasdaq data

The weakest quarter of the cycle

Crypto analyst crypto_birb shares an analysis based on the Stock Trader’s Almanac, which reveals a pattern that recurs every four years in the Nasdaq 100. According to that data, the third quarter of a midterm year is on average the worst quarter of the entire cycle, with an average loss of 3.6%.

That is exactly the phase the market is in now. The attached chart shows that the Nasdaq 100 closes at 28,274.20 points on 31 July 2026, an increase of 167.85 points, or 0.60%, on that day, but still clearly below the peak of around 30,000 points earlier in the year.

Strong recovery expected from Q4

After the weakness in Q3, the historical pattern shows a turnaround. The fourth quarter of a midterm year yields an average of 4.6%, driven by institutional rebalancing, bonus payouts and inflows around the holiday season. That is already considerably more attractive than the previous quarter.

But the real momentum lies in the three quarters that follow. From the fourth quarter of a midterm year through the second quarter of a pre-election year, the average return stands at 29.4%. That is the strongest consecutive window in the entire cycle. The analyst therefore advises holding cash in Q3 and starting to invest in Q4. Whether Bitcoin will also make a similar move in this climate is another question: on-chain data suggests that Bitcoin is still far from capitulation.