Bitcoin's Outlook Revised to Optimistic by Fidelity, JOLTS Data Boosts Crypto

Bitcoin's mid-term outlook has been revised to an "optimism" zone by Fidelity Digital Assets, which suggests that the cryptocurrency is currently undervalued. The firm bases this assessment on the 'Bitcoin Yardstick' metric, which compares Bitcoin's market capitalization to its hashrate. A lower ratio indicates that Bitcoin is relatively cheaper in relation to the security of its network. In the first quarter of 2025, this metric remained between -1 and 3 standard deviations, showing a cooling from the overheated levels of the fourth quarter of 2024. The number of days above 2-standard deviations decreased from 22 to 15, with none exceeding 3, suggesting that Bitcoin is less expensive compared to its network strength.

Fidelity Digital Assets also noted that Bitcoin is in an "acceleration phase," where rallies to new highs are not uncommon. However, they caution that a blow-off top could occur. The illiquid supply of Bitcoin rose from 61.50% to 63.49%, while the liquid supply fell by 4%, indicating that holders are increasingly committed to long-term positions. The Illiquid Supply Shock Ratio is currently 16% below its 2017 peak.

In addition to the optimistic outlook from Fidelity Digital Assets, the March 2025 US Job Openings and Labor Turnover Summary (JOLTS) report showed a significant drop in open jobs, falling to 7.19 million from February’s 7.57 million. This figure was below the forecast of 7.48 million, signaling a cooling labor market. This development has raised expectations for Federal Reserve rate cuts, which typically weaken the dollar and lift risk assets like Bitcoin. Conversely, a higher-than-expected figure would suggest economic strength, potentially delaying rate cuts and pressuring crypto prices. With federal layoffs at a 2020 peak, market expectations are leaning slightly dovish.

Economist and Bitcoin commentator Alex Kruger identified the JOLTS data as a short-term win for Bitcoin, describing it as a "risk/gold hybrid" poised to gain from tariff de-escalation after Trump’s 90-day pause, which ends on July 8. Kruger predicted that markets may focus on earnings guidance from firms and tech stocks, while keeping an eye on the upcoming Federal Open Market Committee (FOMC) meeting, where Powell might signal earlier rate cuts. Kruger also warned of a potential economic slowdown in the third quarter, which could lead to market volatility. However, he believes that Bitcoin’s unique risk-reward profile would outperform altcoins, which he pointed out as overbought.

Ask Aime: What's the price outlook for Bitcoin after Fidelity Digital Assets' 'Bitcoin Yardstick' metric shows it's currently undervalued and in an 'acceleration phase'?