Bitcoin is emerging as the key force behind crypto market stability, says Fidelity Digital Assets.

Fidelity Digital Assets says the crypto market may be showing early signs of recovery, even as prices remain subdued at the start of the second quarter.

In its Q2 2026 Signals Report, the firm highlighted improving on-chain data and network activity, suggesting that conditions are strengthening beneath the surface. Indicators such as unrealized profitability, momentum and usage trends are all beginning to trend higher despite the lack of a clear price breakout.

The report takes a broader approach than price analysis alone, examining risk conditions, investor positioning and cycle dynamics across major cryptocurrencies, including bitcoin (BTC), ether (ETH) and solana (SOL).

Bitcoin continues to anchor the market during this consolidation phase. Rising dominance and steady unrealized profit levels indicate that investors are concentrating capital in the most liquid and established digital asset.

According to analysts led by Daniel Gray, bitcoin’s market dominance has been gradually climbing after weakening in the second half of 2025. BTC was trading around $77,000 at the time of the report.

Price action across crypto markets has been choppy in recent months, with major tokens largely moving sideways. A difficult macro backdrop has weighed on sentiment, including persistent inflation, uncertainty around central bank rate cuts and intermittent volatility in global equities. Regulatory scrutiny in key markets has added another layer of caution for investors.

Geopolitical risks, including conflicts in Eastern Europe and the Middle East, as well as trade tensions between major economies, have also fueled periodic risk-off sentiment, limiting sustained upside.

Despite these challenges, Fidelity noted that current momentum and profitability signals are typical of a corrective phase, which could ultimately help establish a more stable market foundation.

The report also pointed to a growing disconnect between price performance and network fundamentals. Ethereum and Solana continue to record steady usage, indicating that underlying demand remains resilient even as valuations lag.

Overall, Fidelity concludes that while the market is still in a recovery phase, structural improvements are underway that may not yet be fully reflected in asset prices.

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