Fidelity Report: Bitcoin’s Rally Losing Cushion as Year-to-Date Losses Mount

TL;DR:

• Bitcoin records a 25% drop in 2026, placing investors in a “Hope-Fear” zone with very narrow profit margins.
• The market absorbed over $4.6 billion in forced liquidations during two critical events on January 30 and February 4.
• The Yardstick metric indicates that the asset entered an undervaluation zone in October 2025, a state that historically precedes recovery cycles.

Recently, Fidelity Digital Assets warned in its report that Bitcoin’s rally has lost its profit cushion, leaving investors in a vulnerable position. The NUPL metric indicates modest unrealized gains as the market assimilates a 25% drop in the price of the pioneer crypto so far in 2026.

This technical scenario is aggravated by a volume of forced liquidations that reached $2.56 billion on January 30 and $2.13 billion on February 4. The “Yardstick” indicator, which compares capitalization with hashrate, suggests that the asset is in an undervaluation zone, a condition that historically precedes recoveries.

Network metrics and the impact of macroeconomic factors

Despite the correction, the network shows signs of technical resilience. The report highlights that, although momentum is negative, similar levels of NUPL have anticipated median returns of 63% annually.

However, the macroeconomic environment acts as a significant drag. Uncertainty regarding the Fed and the absence of rate cuts for 2026 strengthen the risk aversion sentiment.

While Bitcoin continues to struggle to establish support between $62,500 and $76,022, other networks like Ethereum and Solana suffered even sharper drops of 31% and 38% respectively.

Notably, the transfer volume of stablecoins on Solana remained stable, growing by 8% despite the sharp correction in the native token’s price. The transition toward a sustainable recovery phase will depend on regulatory clarity and the de-escalation of global geopolitical tensions currently weighing on prices.

In summary, Fidelity Digital defines the current state as a “repair phase,” where the lack of a profit cushion demands extreme caution from short-term investors.