Weekly Strategy Report February 20, 2026

1. Weekly Market Overview

This week, the crypto market has entered a weak bottoming phase. The Fear & Greed Index has slightly rebounded but remains in the extreme fear zone, indicating weak sentiment recovery. The total market capitalization oscillates at a low of $2.29 trillion, with BTC and ETH experiencing narrow adjustments. Short-term correction pressures are present, while medium- to long-term oversold signals suggest potential rebounds. ETF capital outflows have significantly narrowed, and institutional risk-avoidance sentiment has eased. The derivatives market continues to deleverage, and the overall market shows signs of stabilization, testing lows, and oscillating at the bottom.

On the macro front, Federal Reserve policy expectations are stabilizing, and global liquidity conditions are marginally improving, easing external pressures on the crypto market. In terms of regulation, the global compliance framework for cryptocurrencies continues to improve, with multiple countries advancing regulations for mainstream coins and stablecoins, accelerating industry standardization. Technologically, Ethereum ecosystem upgrades and Layer 2 solutions are progressing steadily. Institutions are increasing their compliance-focused deployments, and while short-term bottoming persists, the long-term trend toward institutionalization and compliance remains unchanged.

2. Core Market Trends and Capital Flows

This week, the crypto market overall remains in a weak bottoming and marginally improving pattern. Market sentiment has slightly recovered but still remains in extreme fear. Total market value stays low, with short-term correction pressures on mainstream coins and medium- to long-term oversold rebound signals emerging. ETF outflows have significantly narrowed, and the derivatives market is gradually deleveraging. Cautious sentiment has eased somewhat, and the bottoming process continues.

Regarding market sentiment, the Crypto Fear & Greed Index rose slightly from 8 last week to 11, still in the extreme fear zone. Pessimism has eased slightly, and sentiment is in a weak recovery phase, but overall investor confidence has not fully recovered. Risk-averse atmosphere persists, with no clear signs of a comprehensive rebound.

At the market cap level, the total crypto market cap is currently $2.29 trillion, down 1.33% in 24 hours, continuing to oscillate at low levels. While there has been no sharp decline, buying support remains weak, lacking upward momentum, and the market remains under pressure, primarily bottoming out in the short term.

Focusing on the two major cryptocurrencies, BTC and ETH, both show short-term adjustment characteristics and medium- to long-term oversold signals with potential for rebound. BTC is priced at $66,861.32, down 0.79% in 24 hours. Short-term sentiment is somewhat optimistic but faces resistance, with potential for a correction. Medium- to long-term indicators are oversold, suggesting rebound potential, but the trend remains weak. ETH is priced at $1,967.04, with a slight decline over 24 hours. It faces short-term overbought correction pressures, and the medium- to long-term trend is seller-dominated. Although oversold rebound expectations exist, downward pressure persists. Both assets require careful position management and cautious handling amid oscillations.

In terms of capital flows, ETF markets still show net outflows, but the scale of outflows has significantly decreased compared to last week. Bitcoin and Ethereum ETF withdrawals have slowed markedly, indicating a notable easing of institutional risk aversion. While capital conditions are marginally improving, clear signs of capital re-entry have yet to appear.

The derivatives market shows divergence with cautious, moderate deleveraging. Futures open interest has slightly increased, reflecting some hedging demand, while perpetual contracts’ open interest has slightly decreased, with leverage levels steadily contracting. Overall trading activity remains low.

In summary, the current crypto market is in a bottoming phase characterized by weak sentiment recovery, low market cap, and marginal capital flow improvements. Short-term correction pressures coexist with medium- to long-term rebound expectations. Institutional capital withdrawal has slowed, and leverage risks are gradually being cleared. Further confirmation requires sentiment warming, capital reflows, and key support levels stabilizing. Trading should focus on cautious defense, with rational views on short-term volatility.

3. Selected Trading Strategies

4. High-Yield Strategy Highlights

Core strengths:

• Excellent drawdown control: maximum drawdown only 28%, with extremely low volatility among small-cap strategies, ensuring capital safety.
• Strong return potential: over 550% actual return, well-suited for small coins like HBAR with high market elasticity.
• Outstanding risk-reward ratio: 24:1, with single profits covering multiple losses, offering high fault tolerance.
• Reasonable Sharpe ratio: 11, balancing good returns with low risk.

Applicable scenarios: Suitable for medium-risk tolerance traders seeking low-volatility, high-yield small-cap strategies. Designed specifically for small coins with ecosystem potential like HBAR, adaptable to oscillating and trend-switching markets. It can serve as a stable enhancement for small-cap allocations, especially for funds aiming to avoid extreme volatility and pursue stable compound growth. Not suitable for ultra-conservative long-term funds or during extreme bearish markets.

2. High-Frequency Trading Strategy Highlights

Core strengths:

• Top risk-reward ratio: Sharpe ratio of 5.60, highly impressive among high-frequency strategies, offering attractive returns per unit risk.
• Promising yield expectations: annualized return forecast over 30%, with strong long-term compounding potential, ideal for steady capital deployment.
• Suitable for highly liquid assets: designed for BTC, leveraging its deep market liquidity, ensuring efficient and sustainable execution.
• Moderate drawdown: maximum drawdown of 12.15%, within controllable range, ensuring relative capital safety.

Applicable scenarios: Ideal for medium-risk investors seeking low-volatility, steady returns. Tailored for BTC, suitable for quantitative arbitrage and swing trading in oscillating markets. It can serve as a reliable core strategy for capital stability, especially for those aiming to avoid unidirectional volatility and pursue consistent compound growth. Not suitable during extreme unidirectional downturns.

3. High-Stability Strategy Highlights

Core strengths:

• Steady performance: over 80% actual return, with good profit enhancement in mainstream coin strategies.
• Favorable risk-reward: Sharpe ratio of 44, balancing returns and risks well, with strong long-term compounding potential.
• Reasonable profit-loss ratio: 99:1, with single profits covering multiple losses, offering good fault tolerance.
• Controlled drawdown: maximum drawdown of 76%, within a reasonable range for mainstream coins, ensuring relative capital safety.

Applicable scenarios: Suitable for medium-risk traders seeking stable profit enhancement in mainstream coins. Designed for coins like BNB with strong platform ecosystem support, adaptable to oscillating and trend-changing markets. It can serve as an augmented strategy for mainstream coin allocations, especially for funds aiming to increase returns while controlling drawdowns. Not suitable for ultra-conservative long-term funds or during extreme bearish conditions.

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4. 24-Hour Top Gainers and Losers

Top 5 Gainers:

Top 5 Losers:

5. Conclusion

This week, the crypto market sentiment has slightly improved, and capital flows have marginally recovered. The overall market remains in a weak bottoming phase, with mainstream coins oscillating and leverage risks gradually clearing. Industry compliance and technological upgrades are progressing steadily. Long-term institutional deployment remains unchanged, laying a foundation for future recovery. Key focus areas include stabilizing BTC’s critical support levels, signs of ETF capital reflows, and macro liquidity trends. Medium- to long-term opportunities may arise in compliant crypto products, on-chain upgrades of major chains, and stablecoin sectors. Maintain cautious position management and rational responses to short-term volatility. Stay tuned to this column for the latest market insights and strategy analyses.