Market volatility and divergence intensify, with structural opportunities and risks coexist—Morning Analysis and Trading Strategies for the Cryptocurrency Market on February 22, 2026

This morning, the cryptocurrency market shows a significant divergence pattern. Bitcoin price remains in a consolidation range between $67,000 and $69,000, with a 24-hour volatility of approximately 1.83%, and the total market capitalization is about $1.36 trillion. Meanwhile, DeFi and infrastructure sectors perform strongly, with Morpho (MORPHO) leading a 14.84% increase, followed by LayerZero (ZRO) which rose 14.08%. Notably, since January 14, the market has evaporated over $1 trillion in market value, with an average daily loss of about $45 billion over the past 22 days, indicating the market is in a recovery phase after deep correction. Investors should focus on structural opportunities while strictly managing risks.

I. Market Review and Key Data

Bitcoin (BTC) is quoted at approximately $67,787 this morning, with a high of $68,698 and a low of $67,466 in the past 24 hours, showing a narrow fluctuation. Trading volume is about 360,000 BTC, with a turnover of $25 billion, reflecting a cautious market sentiment. From a technical perspective, Bitcoin is currently in a battle zone between the key support at $67,000 and resistance at $69,000, lacking clear momentum for a breakout in the short term.

Ethereum (ETH) and mainstream altcoins fluctuate mildly with the overall market, but the DeFi sector is outperforming against the trend. Morpho, as a decentralized liquidity optimization protocol, leverages its technical advantages in improving capital efficiency, with a daily increase of 14.84%, pushing the price to $1.61. LayerZero’s cross-chain communication protocol benefits from accelerated multi-chain ecosystem development, with ZRO rising 14.08% to $1.73. Additionally, World Liberty Financial (WLFI), Injective (INJ), and Render (RENDER) all recorded steady gains of 5%-6%, indicating funds are gradually flowing into infrastructure projects with practical application scenarios.

It is worth noting that the overall market remains in a recovery phase. Data shows that since January 14, 2026, the total market cap of cryptocurrencies has evaporated over $1 trillion, with an average daily decline of about $45 billion over the past 22 days. This adjustment reflects a correction of previous overheat and provides a window for value investors to reposition.

II. Macro Environment and Influencing Factors Analysis

1. Federal Reserve Policy Expectations and Liquidity Environment

The current global macro environment exerts complex influences on risk assets. The Federal Reserve’s interest rate control mechanisms continue to be effective, with adjustments to reserve balance rates and standing repurchase facilities (SRP) providing liquidity support. As market expectations of rate cuts by the Fed increase, risk asset preferences are expected to gradually recover. Historical experience shows that an easing monetary policy cycle often coincides with valuation expansion in crypto assets.

2. Continuous Inflow of Institutional Funds

Spot Bitcoin ETF fund inflows remain strong. Data shows a net inflow of $6.63 billion over the past five weeks, with institutional crypto portfolios from firms like BlackRock soaring from $54.77 billion at the start of the year to $102.09 billion. The sustained allocation of institutional funds provides solid support for the market bottom and validates digital assets as a long-term asset class.

3. Market Structure Evolution

The market is shifting from speculation-driven to value-driven. The number of wallets holding at least $100 worth of Bitcoin has increased by 25% over the past year, reaching nearly 30 million, indicating continuous new participation and expanding market fundamentals. Meanwhile, risks associated with high-leverage accounts still need attention, as market volatility combined with leverage remains a primary risk.

III. Technical Analysis

Bitcoin (BTC)

From the daily chart, Bitcoin is currently trading within a core consolidation zone between $67,000 and $70,000. Key support levels are at $65,800 (previous low) and $63,000 (psychological threshold), with resistance levels at $69,000, $72,000, and the historical high zone. Technical indicators show short-term moving averages are converging, and MACD hovers near the zero line, indicating the market is at a critical decision point. A successful breakout above $69,000 and stabilization could trigger a new rally; conversely, a drop below $65,000 may lead to deeper correction.

Ethereum (ETH)

Ethereum’s price currently hovers near a key psychological level, with more significant volatility than Bitcoin. On-chain data indicates that despite price pressure, institutional accumulation continues, building momentum for a rebound. Technically, ETH needs to hold support at $2,800, with resistance at $3,200 and $3,500.

DeFi and Infrastructure Sectors

The strong performance of Morpho and LayerZero confirms market demand for liquidity optimization and cross-chain interoperability solutions. These projects have clear tokenomics and practical use cases, demonstrating strong resilience and rebound potential during market adjustments.

IV. Trading Strategy Recommendations

1. Position Management Principles

Adopt a "core + satellite" strategy, allocating 60%-70% of total funds to core assets like Bitcoin and Ethereum as the base holdings, and 30%-40% to high-quality DeFi and infrastructure tokens. No single position should exceed 15% of total funds to avoid excessive concentration risk.

2. Bitcoin (BTC) Trading Strategy

• Short-term traders: buy low and sell high within the $67,000-$69,000 range, with strict stop-loss at $66,000 and take-profit at $70,000. If breaking above $69,500, add to positions; target $72,000. If falling below $66,500, reduce positions and wait.

• Medium- to long-term investors: consider phased building at current levels, with initial positions controlling 30%-40% of planned total. Add on dips near $65,000, viewing below $62,000 as a deep value zone.

3. Ethereum (ETH) Trading Strategy

• Short-term: monitor support at $2,800; if stable, consider light long positions aiming for $3,200.

• Medium- to long-term: deploy in phases between $2,800 and $3,000, with a stop-loss at $2,600.

4. Selected Altcoin Strategy

Focus on assets with the following features:

• Infrastructure: LayerZero (ZRO), Morpho (MORPHO), benefiting from multi-chain ecosystem growth.

• AI and Computing Power: Render (RENDER), sharing GPU computing resources, benefiting from rising AI computing demand.

• Compliant Financials: World Liberty Financial (WLFI), with advantages in regulatory compliance.

Use small positions, no more than 5% of total funds per asset, with strict stop-loss at -15% to -20%.

5. Risk Control Points

• Leverage Management: Given high market volatility, keep leverage within 3x to avoid liquidation risks.

• Stop-Loss Discipline: All short-term trades must have predefined stop-loss levels, with individual losses limited to 2% of principal.

• Liquidity Focus: Prioritize coins with top 50 trading volumes to avoid slippage from illiquidity.

This morning’s market exhibits typical features of "market consolidation and structural divergence." Bitcoin is poised in a key zone, while DeFi and infrastructure sectors outperform against the trend, indicating capital flow toward value assets. Investors should acknowledge market uncertainties, prioritize risk management, and employ phased building, diversification, and strict stop-loss measures to navigate volatility.

In the medium to long term, continuous institutional inflows, potential shifts in Fed monetary policy, and expanding blockchain applications still provide solid fundamental support for crypto assets. The current market correction is more a cyclical adjustment than a trend reversal; patient investors are likely to benefit from subsequent rallies.

Risk Warning: Cryptocurrency markets are highly volatile. This article does not constitute investment advice. Investors should make decisions cautiously based on their risk tolerance and consult professional financial advisors if needed.