Fidelity Digital Property says Bitcoin’s newest drawdown has pushed the market right into a zone that has traditionally aligned with accumulation phases, at the same time as its momentum sign stays detrimental and broader crypto danger urge for food stays slim.
In its Alerts Report Q2 2026, Fidelity’s analysis staff described a market nonetheless working by way of a corrective part fairly than coming into a broad-based enlargement. Bitcoin stays the dominant supply of unrealized profitability throughout the digital asset complicated, whereas different main belongings proceed to stabilize after a pointy reset in Q1.
Fidelity Says Bitcoin Seems to be Undervalued
The report’s clearest Bitcoin value sign comes from the asset’s “Yardstick,” a valuation framework that compares Bitcoin’s market capitalization to hash fee. Fidelity rated the metric optimistic, noting that falling costs and a pullback in hash fee have pushed the indicator into what it calls an “undervalued” zone.
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“Historically, this undervalued zone has aligned with accumulation phases and relative bottoms,” the report said.
In keeping with Fidelity, Bitcoin spent 71 of the earlier 91 days, or 78% of the interval, under detrimental one commonplace deviation of the Yardstick’s imply. The situation first appeared in October 2025 and was amplified by two cold-weather occasions in the USA that quickly curtailed mining exercise as operators diminished energy utilization to assist native grid stability.
That nuance issues. Fidelity doesn’t body the hash-rate decline purely as an indication of deteriorating miner confidence. The report mentioned some analysts have linked the decline to miners shifting towards AI workloads, however argued the transfer might additionally replicate demand-response packages, particularly in areas resembling Texas the place miners routinely energy down throughout peak grid demand.
The value backdrop stays troublesome. Fidelity’s momentum sign for Bitcoin turned detrimental on October 18, 2025, when BTC traded close to $107,000. Since then, Bitcoin has fallen roughly 36%, with most of Q1 2026 spent in an outlined vary between $62,500 and $76,022. The agency mentioned that sample is extra per consolidation than a renewed pattern.
“This signal is not designed to identify precise tops or bottoms,” Fidelity wrote, including that the present studying factors to stabilization fairly than contemporary upside momentum.
Bitcoin’s NUPL rating additionally displays a cautious market. Fidelity mentioned BTC’s internet unrealized revenue/loss stood at 0.21 on the finish of Q1 2026, inserting buyers within the “Hope-Fear” zone. That studying suggests some holders stay in revenue, however the market has not but established broad conviction {that a} sturdy backside is in place.
The historic setup is extra constructive. Fidelity discovered that prior durations when Bitcoin’s NUPL hovered round 0.21, plus or minus 0.01, coincided with a median one-year return of 63% and a three-year compound annual progress fee of 74%. The agency emphasised, nonetheless, that these historic relationships might weaken or fail to persist, notably when macro situations dominate digital asset flows.
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Individually, Fidelity’s Jurrien Timmer pointed to a extra tactical Bitcoin setup, sharing a chart that reveals BTC testing the higher boundary of what he described as a possible bear flag. The chart locations Bitcoin close to $79,486 after its rebound from the February low round $60,033, with momentum indicators shifting again into overbought territory.
Timmer framed the present setup as an essential technical take a look at. “Technical Analysis 101 states that when bear market rallies get overbought, it’s usually the kiss of death and time to sell,” he wrote. “However, during bull markets overbought momentum means that the market is strong and likely to stay strong.”
His conclusion sharpened the worth query raised by Fidelity’s broader report: whether or not Bitcoin continues to be trapped in a corrective construction or starting to transition into a brand new bull part. “If Bitcoin cannot be pulled down by this current combination of overbought momentum and trendline resistance, then this is an emerging bull market and not a bear market rally,” Timmer mentioned, including that this has been his “hunch all along” and “may be about to get confirmed.”
At press time, BTC traded at $76,036.
Featured picture created with DALL.E, chart from TradingView.com
