Fidelity Updates BTC’s Medium-Term Outlook: Bitcoin No Longer Affordably Priced

Fidelity Digital Assets has adjusted its outlook for Bitcoin (BTC) from “positive” to “neutral” in the medium term. The company cited several metrics that indicate Bitcoin is no longer considered undervalued and may face increased selling pressure. One of these metrics is the Bitcoin Yardstick, which measures if Bitcoin is undervalued in a similar way to the Price-to-earnings ratio in stocks. Fidelity noted that the Yardstick remained between a negative one and zero deviations from the mean in the first quarter, indicating that Bitcoin was not considered cheap during that time. This suggests that Bitcoin is now trading at fair value, leading Fidelity to revise its outlook to neutral. Other metrics supporting this neutral outlook include long-term holders adding to sell pressure and 99% of addresses being in profit, potentially incentivizing selling. On-chain metrics, such as the Net Unrealized Profit/Loss ratio and the MVRV Z-Score, also contribute to the neutral outlook in the mid-term. However, Fidelity maintains a positive short-term outlook for Bitcoin, noting that there are no extreme indicators commonly seen during bull market peaks. The company highlights that price levels have remained above a “golden cross” on the Bitcoin chart, indicating bullish momentum. Additionally, on-chain data shows continued accumulation by smaller investors and a decline in exchange balances as more investors move to self-custody, reducing selling pressure. Overall, Fidelity believes that Bitcoin is currently in a middle-ground or halfway point of the market cycle, with potential for short-term profit-taking but not extreme highs. Bitcoin has been range-bound since the end of February, but has gained 5% since the weekend halving event and is currently trading at a ten-day high of $66,863.