BTC and ETH technical analysis: Wave analysis from historical highs to support levels

The cryptocurrency market has experienced a deep correction over the past few months. As of mid-February 2026, BTC’s circulating market cap has fallen to $132.8 billion, and ETH’s market cap has further declined to $23.5 billion. Market participants are generally confused—despite this rebound being highly anticipated, why has it fallen into a significant retracement? This article attempts to deconstruct this complex trend logic from a technical perspective.

Market Status: Market Cap Rankings and Panic Selling

Compared to the early bull market on April 8, 2025, the performance of the two main cryptocurrencies has been disappointing. BTC has dropped from a historical high of approximately $126,000 to the current $66,470, a decline of nearly 47%. ETH’s situation is even more severe, falling from a peak of $4,957 to $1,950, a total decline of over 61%.

The most striking phenomenon in this correction is panic selling. On-chain data shows that major fund outflows for BTC and ETH have exceeded $5 billion, reflecting widespread selling pressure from institutions and retail investors. Many retail investors bought the dip at around $2,600 but got trapped during the subsequent decline, with unrealized losses increasing daily.

Monthly Chart Deconstruction: Has the 5-Wave Downtrend Completed?

From a technical analysis standpoint, the key question is: at which stage of the bear market are we? Using wave theory on the monthly chart, the decline of BTC and ETH can be deconstructed into a standard 5-wave downtrend.

BTC’s monthly decline is 12.4% (single month), with a retracement from high to low exceeding 40%. ETH’s monthly decline is 21.6%, with an overall retracement over 55%. Based solely on these figures, it’s difficult to determine whether the 5-wave pattern has completed. The critical factor is observing the strength and structure of the next rebound.

If the rebound can break through key resistance levels, it suggests the bear market may be nearing its end; if the rebound is weak, it indicates further deeper declines are ahead.

Support Levels Analysis: Key Price Zones of Whale Concentration

Support levels are crucial for understanding the future trend. Based on on-chain data and cost distribution analysis, the major support zone for BTC is between $68,000 and $69,000. This range is the primary cost concentration of old whale addresses, representing the average cost basis of long-term holders.

What does $75,000 signify? This level is merely the cost accumulation zone for large institutions. For example, MicroStrategy, a US-listed company, has built a BTC position worth $4.5 billion through multiple rounds of accumulation. Whether such institutions can hold their positions in the face of a major trend reversal remains to be seen.

If the trend truly reverses downward, even these whales may struggle to support the market alone. Therefore, BTC’s key support is the whale concentration zone at $68,000–$69,000, not $75,000.

Institutional Capital Flows and Major Trend Judgment

Another market signal comes from changes in capital liquidity. Over the past few weeks, despite net outflows exceeding $5 billion, from a macro perspective, global capital costs have been steadily decreasing. This suggests that the timing for cheap capital to re-enter the market may be approaching.

In other words, the current “crisis” might be a short-term liquidity panic rather than a systemic fundamental risk. If capital costs continue to decline, institutional buying enthusiasm could be reignited.

Practical Trading Strategies: Long-Short Transition Tips

From a trading perspective, the current environment suggests the following approach:

During rebounds, consider swing buying around ETH $2,350. This level has fallen into extreme fear territory, offering a favorable risk-reward ratio. Correspondingly, for BTC, look around $81,000, forming a linked position with ETH.

If you can buy at these levels, the next key is to observe the rebound strength. If the rebound fails to break previous highs (ETH $2,600, BTC $75,000+), consider taking profits early to prepare for a possible secondary decline. Conversely, if the rebound breaks through these resistances, reassess the trend direction.

Currently, market recovery strength remains weak. In this context, maintaining cautious operation, taking small profits first, and observing subsequent developments is a more prudent strategy.

Risk Reminder and Market Outlook

It is important to emphasize that the above analysis is based on technical and capital flow observations and does not constitute investment advice. Cryptocurrency markets are far more volatile than traditional assets, and all trading involves real principal risk.

Although this correction has been deep, historically, such bottom-finding processes are common. The key is to patiently wait for trend confirmation signals rather than blindly chasing rallies or panicking during declines. Whether one can pass this test depends on each participant’s risk management and psychological resilience.