Fidelity: Bitcoin Holders Barely in Profit After 25% Drop

Fidelity Digital Assets’ Q2 Signals Report, released Monday, shows bitcoin holders are barely in profit. Bitcoin’s net unrealized profit/loss (NUPL) stood at 0.21, placing BTC in a Hope-Fear zone. Ethereum’s NUPL fell to -0.12 and Solana’s to -0.67 after sharp price declines in the first quarter.

The report records year-to-date through Q1 2026 performance of bitcoin down 25%, ethereum down 31% and solana down 38%. Over the trailing 12 months, ethereum is up 15%, bitcoin is down 17% and solana is down 33%.

Fidelity highlights two large forced liquidation events that accelerated selling: $2.56 billion on Jan. 30 and $2.13 billion on Feb. 4, about $4.7 billion in total. The report also cites macro factors, including uncertainty over a potential nomination of Kevin Warsh as Federal Reserve chair and market moves that reduced expectations for rate cuts in 2026.

Technical indicators weakened after Oct. 18, 2025, when bitcoin’s momentum signal turned negative and BTC traded near $107,000. Since that signal flipped, price has declined about 36%. For most of Q1 2026, bitcoin traded between roughly $62,500 and $76,022. Fidelity’s Yardstick metric moved into an “undervalued” zone in October 2025.

Network and infrastructure metrics show strain. Bitcoin’s hashrate dropped below the one zettahash-per-second milestone first reached in September 2025. Fidelity links the decline to price pressure and two U.S. cold-weather events that prompted some miners to curb energy use. The report notes mining hardware is application-specific and is more likely to be sold or relocated than repurposed for other tasks.

Market concentration shifted toward bitcoin in early 2026. BTC dominance rose into Q2 after falling in the latter half of 2025. The report says a plateau or reversal in dominance could be an early sign of capital rotating into altcoins.

Onchain activity differs across networks. Ethereum’s transaction activity rose 34% quarter-over-quarter; active addresses increased 34% and new addresses rose 18%, both exceeding peaks from the 2021 bull market. Stablecoin transfers on ethereum exceeded $18 trillion over the past 12 months, and the 30-day average transfer value increased from $59.2 billion to $73.4 billion. Average transaction costs on ethereum remained below $1 for a second straight quarter. The report notes lower fees can invite spam, which complicates assessment of how much activity reflects economic usage versus noise.

Solana’s 30-day average stablecoin transfer value rose 8% to $7.2 billion. Monthly active addresses and new addresses increased 50% and 35% respectively, reaching the highest levels since 2021. Network fees have fallen from the peaks seen during the 2024–early-2025 meme-coin period.

Fidelity characterizes current market conditions as a “repair phase.” The report lists geopolitical de-escalation, clearer regulatory direction and a more certain Fed policy path as conditions that would be needed for sustained expansion. The report also notes that similar NUPL levels historically preceded a median one-year return of 63% and that 78% of the past 91 days fell below negative one standard deviation of the mean, a pattern that lasted about 298–299 days in the 2018 and 2022 bear cycles and which the analysts identify as a potential reference point for October 2026.