The oscillation bottoming pattern continues, and structural opportunities are emerging—Morning analysis and trading strategies for the cryptocurrency market on February 21, 2026

Currently, Bitcoin is consolidating in the $67,000-$68,000 range, down about 30% from its mid-January high. Market sentiment has entered the "fear zone." Ethereum has broken below the $2,000 psychological level. Overall, the market is in a recovery phase after deleveraging. It is recommended to adopt a "core position defensive + tactical position trading" strategy, focusing on signals of the Federal Reserve's policy shift and signs of institutional capital returning.

1. Market Overview Scan

Bitcoin (BTC): As of February 20, Bitcoin is quoted at approximately $67,879, up 1.34% intraday, with a 24-hour trading volume of about $56.96 billion. From a market cap perspective, Bitcoin’s total market value has fallen from its mid-January peak of $1.9 trillion to about $1.339 trillion, a decrease of approximately 29%. This correction is of moderate depth historically and forms a technical symmetry with the consolidation period before the August 2024 rally from $61,000.

Ethereum (ETH): ETH has recently underperformed the broader market, breaking below the $2,000 mark. According to market news, on February 15, ETH briefly fell below 2,000 USDT, with a 24-hour decline of 3.62%. As a leading altcoin indicator, ETH’s continued weakness reflects a systemic decline in risk appetite.

Market Sentiment Indicator: The Fear and Greed Index has dropped to 32, officially entering the "fear" zone. This reading indicates retail investor sentiment is becoming cautious, but from a contrarian investment perspective, extreme panic often corresponds to a stage bottom.

2. Key Driving Factors Analysis

1. Macro Liquidity Tightening Expectations

The Federal Reserve’s interest rate policy remains the core variable influencing the crypto market. Based on the previous Fed rate adjustment mechanism you shared, the December FOMC meeting canceled the standing repo (SRP) daily limit of $500 billion, theoretically releasing unlimited liquidity support. However, the market is currently pricing in a delay or pause in rate cuts, creating a divergence from the previously overly optimistic easing expectations, which has put pressure on risk assets.

2. Institutional Capital Phase-Out

Recent net outflows have occurred from spot Bitcoin ETFs. Data shows that on February 19, the total net outflow from Bitcoin spot ETFs reached $166 million. This aligns with the trend you previously mentioned of BlackRock’s crypto investment portfolio shrinking from $102.09 billion, indicating that institutions have not yet re-entered on a large scale after taking profits at high levels.

3. Geopolitical Disruptions

Uncertainty around tariffs under the Trump administration continues to suppress risk asset preferences. Delays in the U.S. Supreme Court’s rulings on tariffs, coupled with tariff warnings against eight EU countries, have driven safe-haven funds into gold and other traditional assets.

3. In-Depth Technical Analysis

Bitcoin Key Levels:

• Support: $65,000-$66,000 (previously dense trading zone)

• Resistance: $70,000 (psychological level and 20-day moving average)

• Trend Judgment: Daily chart shows a downward channel, but four-hour chart indicates bottom divergence signs, suggesting a short-term technical rebound possible.

Reviewing your previous analysis of the $91,000 key resistance level, the current price has deviated significantly from that level. The market is searching for a new equilibrium point. From a long-term cycle perspective, the move from $61,000 in August 2024 to early 2025-2026 forms a complete macro bull cycle. The current correction can be viewed as a technical adjustment within that cycle.

4. Trading Strategy Recommendations

Core Position Allocation (60%-70%)

Bitcoin Spot: Suggest building positions gradually in the $66,000-$67,000 range, using dollar-cost averaging to smooth costs. Referencing your previous "gold as risk control anchor" strategy, if 30%-40% of assets are allocated to gold, the remaining funds can be gradually deployed into Bitcoin within this price range.

Ethereum Spot: Wait for clear stabilization signals. Consider small long positions in the $1,800-$2,000 range, with strict stop-loss settings.

Tactical Position Trading (20%-30%)

Swing Trading: If Bitcoin encounters resistance near $70,000 during a rebound, reduce positions accordingly; if volume breaks through $72,000, the trend may reverse, and additional positions can be added.

Options Strategies: With implied volatility at relatively high levels, consider selling out-of-the-money put options to collect premiums or constructing bullish spread strategies.

Risk Hedging (10%)

Maintain stablecoin holdings to seize bottom opportunities in extreme market conditions. Pay attention to Federal Reserve officials’ speeches and non-farm payroll data revisions affecting market expectations.

5. Risk Alerts

1. Macro Policy Risk: If the Fed signals a more hawkish stance, it could trigger a new round of sell-offs.

2. Liquidation Risk: Be cautious of cascading liquidations from high leverage positions causing flash crashes (the market experienced $1 billion in liquidations on January 21).

3. Regulatory Risk: Ongoing developments in U.S. stablecoin legislation and SEC enforcement actions require continuous monitoring.

Disclaimer: This analysis is for reference only and does not constitute investment advice. Cryptocurrency markets are highly volatile. Please make decisions cautiously based on your risk tolerance, and avoid using leverage or borrowed funds for investment.