Fidelity Says Bitcoin Has Thin Profit Cushion as Macro Risks Drive 25% YTD Decline

Key Takeaways:

• Fidelity Digital Assets rates bitcoin’s Q1 2026 NUPL people astatine 0.21, placing BTC successful the cautious “Hope-Fear” zone.
• BTC, ETH, and SOL fell 25%, 31%, and 38% year-to-date, driven partially by $2.56B successful January liquidations.
• Ethereum’s stablecoin transportation worth deed an all-time precocious supra $18 trillion, signaling real-world inferior maturation successful Q2 2026.

Bitcoin Investors Barely successful Profit arsenic Market Enters ‘Repair Phase,’ Fidelity Says

Bitcoin’s NUPL speechmaking places investors successful what Fidelity researchers describe arsenic the “Hope-Fear” zone, a information marked by humble unrealized profits and cautious sentiment. The speechmaking does not corroborate that a durable bottommost is successful place, though the probe squad notes that akin NUPL levels person historically preceded a median one-year instrumentality of 63%.

The broader representation is little stable. Ethereum’s NUPL fell 171% implicit the archetypal quarter, from 0.17 to -0.12, arsenic the terms dropped 29%. Solana’s NUPL fell 148%, landing astatine -0.67, portion SOL terms shed 33% during the aforesaid period. Both networks amusement tentative signs of stabilization aft touching section lows successful aboriginal February.

Source: Fidelity Digital Assets report.

Year-to-date (YTD) show crossed each 3 assets remains negative. Bitcoin is down 25%, ethereum is down 31%, and solana has fallen 38% since January 1. The one-year rolling representation is much mixed: Bitcoin is disconnected 17%, solana is down 33%, and ethereum is the lone positive, up 15% implicit the trailing 12 months.

Two ample liquidation events accelerated the drawdown aboriginal successful the year. The crypto marketplace absorbed $2.56 cardinal successful forced selling connected Jan. 30 and $2.13 cardinal connected Feb. 4, the Fidelity analysts note. Those events, combined with macro headwinds including uncertainty astir the information of Kevin Warsh arsenic Fed Chair and marketplace expectations shifting toward nary complaint cuts successful 2026, reinforced risk-off sentiment crossed integer assets.

Bitcoin’s momentum signal, which turned antagonistic connected Oct. 18, 2025, erstwhile BTC traded adjacent $107,000, remains successful antagonistic territory. Since that awesome flipped, bitcoin has declined astir 36%. For astir of Q1 2026, BTC traded betwixt $62,500 and $76,022 arsenic the marketplace worked to found support.

The Yardstick metric, a measurement that compares bitcoin’s market cap to its hashrate, moved into its “undervalued” portion successful October 2025. Seventy-eight percent of the past 91 days fell beneath antagonistic 1 modular deviation of the mean. Fidelity’s analysts enactment successful the study that anterior bear markets saw akin conditions past 298 days successful 2018 and 299 days successful 2022, suggesting October 2026 whitethorn beryllium a cardinal notation constituent for cycle-focused investors.

Bitcoin’s hashrate fell beneath the 1 zettahash per 2nd (ZH/s) milestone archetypal crossed successful September 2025. The diminution correlates with terms compression and 2 U.S. acold upwind events that prompted miners to curtail vigor usage. Fidelity’s analysts propulsion backmost connected the communicative that miners are shifting capacity to artificial quality (AI) workloads, noting that bitcoin mining hardware is application-specific and much apt to beryllium sold oregon relocated than repurposed.

BTC dominance continued rising into Q2 2026 aft pulling backmost successful the second fractional of 2025. The Fidelity study frames expanding dominance arsenic a awesome that superior remains concentrated successful bitcoin, with constricted rotation into altcoins. A plateau oregon reversal successful dominance, the study suggests, could people an aboriginal displacement toward risk-on behavior.

Ethereum’s onchain usage metrics showed a antithetic picture. Transaction enactment roseate 34% quarter-over-quarter, and progressive and caller addresses climbed 34% and 18% respectively, some surpassing highest levels from the 2021 bull market. The probe squad flags that little transaction costs thin to invitation spam activity, raising questions astir whether the usage gains are economically meaningful.

Ethereum’s stablecoin transportation worth crossed an all-time precocious implicit the past 12 months, exceeding $18 trillion successful full transportation volume. The 30-day mean transportation worth moved from $59.2 cardinal to $73.4 billion. Transfer costs remained beneath $1 for a 2nd consecutive quarter. Fidelity researchers construe this arsenic grounds that stablecoins are being utilized for payments and colony enactment autarkic of speculative terms behavior.

Solana‘s stablecoin transportation volumes held dependable done the terms downturn, with the chain’s 30-day mean transportation worth rising 8% to $7.2 billion. Monthly progressive and caller addresses connected Solana roseate 50% and 35%, respectively, during Q1 2026, reaching their highest levels since 2021. Network fees, which peaked during the 2024-to-early-2025 meme coin period, stay successful a downtrend.

Fidelity’s researchers picture existent marketplace conditions arsenic a “repair phase” alternatively than a late-cycle nett environment, with immoderate sustained enlargement babelike connected geopolitical de-escalation, regulatory clarity, and a clearer Fed policy path.