February 28, 2026 Cryptocurrency Market Analysis and Trading Recommendations

1. Core Market Overview (as of 13:00 Beijing Time, February 28)

- Bitcoin (BTC): Spot price approximately $65,600, down 2.1% in 24 hours, with a daily low of $64,900. It has recorded a fifth consecutive monthly decline since October 2025, with a monthly drop of over 8%.
- Ethereum (ETH): Spot price approximately $1,950, down 3.8% in 24 hours. After a single-day drop of over 5% on Friday, it lost the key psychological level of $2,000, with a daily low of $1,890.
- Overall Market: Total global cryptocurrency market cap around $2.35 trillion, down 2.2% in 24 hours; total trading volume $104.9 billion. BTC market share: 56.1%, ETH market share: 9.92%. Market funds continue to concentrate in leading mainstream coins, with altcoins generally experiencing larger declines.
- Market Sentiment: Cryptocurrency Fear and Greed Index at 11, in extreme fear zone, continuing to decline from yesterday, with panic spreading.
- Derivatives Market: Nearly $320 million in total contract liquidations in the past 24 hours, with over 75% of liquidations on long positions. Leverage effects are evident during the decline.

2. Core Drivers of the Current Market Decline

1. Macroeconomic Environment Continues to Suppress, Risk Appetite Significantly Diminished

US January PPI data exceeded expectations, coupled with strong non-farm and CPI data, leading to a significant delay in Fed rate cut expectations and even hawkish pricing for rate hikes within the year. The 10-year US Treasury yield rose to 4.06%. All three major US stock indices closed lower, tech stocks weakened, and global risk assets faced pressure. As a high-risk asset, cryptocurrencies are among the first to be sold off.

2. Institutional Funds Continue to Outflow, ETFs Shift from Growth Driver to Pressure Source

US Bitcoin spot ETFs have experienced continuous net outflows for several months, with January 2026 seeing a single-month outflow of $3.5 billion, a near-one-year high. Over the past four weeks, global crypto ETFs have outflowed over $3.7 billion. Institutions like Harvard University reduced their Bitcoin holdings by 21% in early February, indicating risk-averse withdrawal. The market lacks incremental capital inflows, and the supply-demand game continues to favor selling pressure.

3. Technical Breakdowns + Liquidity Contraction Form a Negative Cycle

BTC and ETH have broken below key support levels, triggering stop-losses and forced liquidations of contracts, creating a death spiral of “decline → liquidation → forced selling → further decline.” Meanwhile, weekend market liquidity has sharply contracted, with small sell-offs capable of causing large price swings, further amplifying the downward trend.

4. Underlying Asset Confidence Shaken, Long-term Allocation Logic Impacted

Recent events such as the US Department of Justice seizing large amounts of Bitcoin through “technological theft + judicial packaging” continue to undermine market confidence in the core beliefs of crypto’s “decentralized security” and “asset sovereignty.” Risk pricing by institutions is being restructured, and long-term capital inflows have significantly decreased.

3. Key Technical Levels of Mainstream Coins

Bitcoin (BTC)

- Core Support Levels: First support at $64,500–$65,000 (daily low + previous consolidation lower boundary), strong support at $62,500 (key trendline in this decline, breaking below opens further downside space).
- Core Resistance Levels: First resistance at $67,000 (4-hour midline + recent consolidation upper boundary), strong resistance at $68,000–$70,000 (daily level resistance zone, volume breakout needed for trend reversal).
- Technical Pattern: Daily chart in a downtrend, MACD bearish momentum persists, price running near the lower Bollinger Band; 4-hour rebound with low volume, rebound momentum weak, likely to maintain weak oscillation in the short term.

Ethereum (ETH)

- Core Support Levels: First support at $1,870–$1,900 (daily low + previous high-volume zone), strong support at $1,800 (key level in this decline, breaking below accelerates downward).
- Core Resistance Levels: First resistance at $2,000 (psychological level + 4-hour midline), strong resistance at $2,080–$2,100 (daily resistance zone, volume breakout needed to change trend).
- Technical Pattern: After breaking below $2,000, bearish trend confirmed, weaker than BTC; 4-hour MACD shows insufficient bullish momentum, likely to face resistance and fall back.

4. Trading Recommendations by Type

1. Spot Investors

- Conservative (Long-term): No clear stabilization signals currently, avoid blindly bottom-fishing. Keep positions below 30%. If BTC drops near $62,500 and volume signals stabilization, consider small, phased entries, prioritizing top mainstream coins like BTC, avoiding altcoins.
- Short-term Traders: Weekend liquidity is poor, volatility unpredictable. It’s advisable to stay on the sidelines, avoid rushing into positions. If BTC stabilizes with volume in the $64,500–$65,000 range, try small long positions with stop-loss below $64,000, target around $67,000. If a rebound hits resistance near $67,000, consider small short positions with stop-loss at $67,800, target around $65,000.

2. Contract Traders

- Strictly control position sizes: no more than 10% per instrument, total positions no more than 20%. Avoid high leverage; weekend liquidity is thin, prone to flash crashes. Stop-loss must be strictly implemented.
- Focus on range trading: BTC core range $64,500–$67,000; ETH core range $1,900–$2,000. Buy low and sell high within the range. After breakout, follow the trend; avoid counter-trend holding.

3. General Risk Control Principles

- Abandon “bottoming out at the top” obsession. The current downtrend requires time and volume confirmation for reversal. Do not assume a bottom based on short-term rebounds.
- Prioritize avoiding small coins and altcoins. During bear markets, funds concentrate in top assets, and liquidity and zero-risk risks of non-mainstream coins are very high.
- Manage positions well, keep sufficient cash reserves to handle extreme scenarios. Do not fully deploy all capital at once.

5. Risk Reminder

Cryptocurrency markets are high-risk investments influenced by macro policies, regulatory developments, and market sentiment, with extreme price volatility. This analysis is for market information sharing only and does not constitute investment advice. Investors should assess their risk tolerance, make rational decisions, implement strict stop-losses, and bear the investment risks independently.