Fidelity Digital Assets, a leading digital asset investment firm, has revised its medium-term outlook for Bitcoin, the world's largest cryptocurrency by market capitalization. In a recent report, the firm adjusted its view from positive to neutral, citing a range of metrics that suggest Bitcoin is currently trading at fair value.

While Fidelity still sees potential for short-term gains in the Bitcoin market, its medium-term outlook is more cautious due to signs of increased sell pressure and profit-taking from long-term holders. The firm's analysts point to several key metrics, including the Bitcoin Yardstick, Net Unrealized Profit/Loss (NUPL) ratio, and MVRV Z-Score, which indicate that Bitcoin is no longer undervalued and is trading at a fair price.

The Bitcoin Yardstick, a metric that measures the price-to-earnings ratio of Bitcoin, suggests that the cryptocurrency is currently trading at a level that is in line with its historical average. Similarly, the NUPL ratio, which measures the difference between Bitcoin's market capitalization and its realized capitalization, indicates that the cryptocurrency is trading at a fair value. The MVRV Z-Score, which measures the ratio of Bitcoin's market capitalization to its realized capitalization, also suggests that the cryptocurrency is trading at a level that is consistent with its historical average.

Fidelity's analysts believe that these metrics, combined with signs of increased sell pressure and profit-taking from long-term holders, warrant a more cautious medium-term outlook for Bitcoin. While the firm still sees potential for short-term gains, it notes that the cryptocurrency's medium-term prospects are more uncertain due to the risk of increased selling pressure and decreased demand.

Overall, Fidelity's revised outlook for Bitcoin highlights the importance of careful analysis and risk management in the digital asset space. As the cryptocurrency market continues to evolve, investors must remain vigilant and adapt to changing market conditions in order to maximize their returns and minimize their risks.