Fidelity Digital Assets has released its Q2 2026 Signals Report, revealing that Bitcoin's Net Unrealized Profit/Loss (NUPL) stands at 0.21, placing investors in a 'hope and fear' zone characterized by slim unrealized gains and cautious positioning. In contrast, Ethereum's NUPL dropped 171% to -0.12, and Solana's NUPL fell 148% to -0.67, both remaining in capitulation territory.
BTC, ETH, SOL All Negative YTD
Bitcoin has declined 25% year-to-date, Ethereum 31%, and Solana 38%. On an annual basis, Bitcoin is down 17%, Solana 33%, while Ethereum is the only asset up 15% over the past 12 months. Two major liquidation events accelerated sell-offs in early 2026: $2.56 billion on January 30 and $2.13 billion on February 4. Combined with macro uncertainties — including Kevin Warsh's nomination as Fed Chair and market expectations of no rate cuts in 2026 — risk aversion dominated crypto markets.
Bitcoin Momentum Signal Negative, Hashrate Dips Below 1 ZH/s
Fidelity notes that Bitcoin's momentum signal turned negative on October 18, 2025, when BTC traded near $107,000, and has since lost about 36%. Throughout most of Q1 2026, BTC traded between $62,500 and $76,022 as the market sought support. The Yardstick indicator (market cap/hashrate) entered 'undervalued' territory in October 2025, spending 78% of the past 91 days below one standard deviation below the mean. Historically similar conditions lasted 298 days in 2018 and 299 days in 2022, hinting that October 2026 may be a pivotal reference point. Bitcoin's hashrate has fallen below 1 Zettahash/s, partly due to U.S. cold spells causing miners to curtail energy use.
On-Chain Activity Mixed: Ethereum Stablecoin Transfers Top $18 Trillion
Despite price weakness, Ethereum transaction activity rose 34% quarter-over-quarter, with active and new addresses increasing 34% and 18%, respectively, surpassing even 2021 bull run peaks. Fidelity researchers caution that lower fees may incentivize spam, questioning the economic significance of the surge. However, stablecoin transfer value on Ethereum exceeded $18 trillion over the past 12 months, with the 30-day average climbing from $59.2 billion to $73.4 billion. Transfer costs remained below $1 for the second consecutive quarter, indicating stablecoins are being used for payments and settlements independent of speculative swings. On Solana, active and new addresses grew 50% and 35% in Q1 2026, reaching levels not seen since 2021, but network fees continued to decline.
Market in 'Repair Phase', Full Recovery Awaits Policy Clarity
Fidelity describes current conditions as a 'repair phase' rather than a late-cycle profit environment. Sustained expansion depends on easing geopolitical tensions, regulatory clarity, and a clearer Fed policy path. Notably, Bitcoin's dominance continued to rise in Q2 2026, suggesting capital remains concentrated in BTC rather than rotating into altcoins. A stabilization or reversal in dominance could signal an early shift towards risk-on behavior.