Fidelity Digital Assets says the latest drawdown has pushed the market into a range that has often matched accumulation phases, while bitcoin analysis still points to negative momentum and cautious risk conditions.
Summary
Signals suggest a corrective phase
In its Signals report for Q2 2026, the firm argues that crypto remains in a correction rather than a broad expansion. Bitcoin still leads the sector in unrealized profit, while other major assets have stabilized after the sharp reset in Q1.
Moreover, Fidelity says bitcoin now looks undervalued. The report highlights the Yardstick framework, which compares Bitcoin‘s market cap with hash rate, and says the price decline and lower hash rate have moved the metric into an undervalued zone.
The company adds that Bitcoin spent 71 of the last 91 days, or 78% of the period, below the Yardstick mean minus one standard deviation. That condition first appeared in October 2025 and was reinforced by two winter events in the United States that temporarily limited mining activity.
However, Fidelity says the drop in hash rate does not necessarily signal weaker miner confidence. Some analysts link the decline to a possible move toward AI-related workloads, while the report also points to demand-response programs. In places such as Texas, miners may reduce or shut off power during grid stress.
Momentum remains negative
From a market direction view, the picture remains mixed. Fidelity says bitcoin analysis turned negative on 18 October 2025, when BTC traded near 107.000 dollars. Since then, Bitcoin has fallen by about 36%.
Moreover, much of Q1 2026 traded between 62.500 and 76.022 dollars. Fidelity says that pattern fits consolidation more than a fresh uptrend, and the signal is meant to track regime shifts rather than precise tops or bottoms.
The current reading, therefore, suggests stabilization instead of an immediate rebound. The firm argues that the setup still needs time before it can confirm a stronger directional move.
NUPL and the broader market view
The NUPL metric, or net unrealized profit/loss, also points to caution. By the end of Q1 2026, Bitcoin stood at 0,21, placing investors in the Hope-Fear zone. That level suggests some holders remain in profit, but conviction about a lasting bottom is still limited.
Historically, Fidelity says periods near 0,21, plus or minus 0,01, have been followed by positive returns. The firm cites a median one-year return of 63% and a three-year CAGR of 74%. However, it warns that those relationships can weaken if macro forces dominate market flows.
In a separate tactical view, Jurrien Timmer says Bitcoin is testing the upper edge of a possible bear flag. He places BTC near 79.486 dollars after a rebound from the February low around 60.033 dollars, with momentum indicators back in overbought territory.
That said, Timmer says the signal depends on the market context. In a bear-market rally, overbought readings are usually negative. In a bull market, they can confirm strength and support the trend.
He says the key question is whether Bitcoin can break resistance and avoid being pulled lower by momentum and the descending trendline. If it holds, Timmer argues, the market could be showing the start of a broader uptrend rather than a simple corrective bounce.
At the time of publication, Bitcoin traded at about 76.036 dollars, leaving traders focused on whether this phase becomes a durable accumulation zone or another failed rebound.
