Weekly Crypto Recap: Deep Capitulation Amid Macro Turmoil and Extreme Fear

Between February 9 and February 23, 2026, the cryptocurrency market entered one severe drawdown phase during the current cycle, as Bitcoin fell from the mid-$70,000 range to lows near $65,000 before staging a modest rebound. Total market capitalization declined sharply to $2.26 trillion, while 24-hour trading volume remained elevated at $76.95 billion, reflecting sustained liquidation pressure and panic-driven selling across major assets. Altcoins experienced deeper structural damage, with Ethereum breaking below $1,900 and Solana falling under $80 as higher beta assets reacted more aggressively to tightening liquidity and deteriorating sentiment.

This capitulation phase emerged from multiple macro shocks. Renewed US government shutdown risks, escalating tariff tensions including Trump’s 100% tariff threat on Canada, China’s crackdown on stablecoin issuers, and rising corporate tariff pressure reinforced defensive positioning. Meanwhile, the Federal Reserve maintained a hawkish stance despite softer CPI and PCE data, strengthening expectations for prolonged restrictive financial conditions. Market sentiment collapsed into extreme fear territory, with the Fear and Greed Index falling to 14, while late period stabilization and selective accumulation near local lows indicate early signs signaling selling exhaustion. Let’s examine how market structure, macro pressure, and capital positioning shaped this capitulation phase.

Image 1: The Crypto Market Overview dashboard from CoinMarketCap captures the extended bear phase, with total market cap at $2.26T and volume $76.95B. Top coins are deep red: Bitcoin at $65,796.33 (down 3.25%), Ethereum at $1,882.04 (down 4.73%), BNB at $599.07 (down 3.65%), Solana at $79.19 (down 7.11%), XRP at $1.3683 (down 3.75%). Fear and Greed Index at 14 (Extreme Fear), Altcoin Season Index 32 (Bitcoin Season), CoinMarketCap 20 Index $135.04 (down 3.64%). The chart shows a prolonged downward channel from late January, with the latest leg lower into mid-February.

Price Updates for Major Coins

• Bitcoin (BTC): Continued its sharp descent from $70,000+ levels, hitting lows near $65,000 before a minor bounce to $65,796 (down 3.25% snapshot). Multi-week losses exceed 30% from January highs.
• Ethereum (ETH): Crashed below $2,000 to $1,882 (down 4.73%), suffering steeper percentage declines as risk-off sentiment hammered alts.
• Solana (SOL): Plunged to $79.19 (down 7.11%), high-beta exposure amplifying losses amid ecosystem uncertainty.
• XRP: Fell to $1.3683 (down 3.75%), holding above $1.30 despite macro pressure.
• BNB: Dropped to $599.07 (down 3.65%), reflecting broader exchange caution.

Market Overview: Sentiment Enters Neutral Territory

Image 2: The CMC Crypto Fear and Greed Index plunged to 14 (Extreme Fear), with values: yesterday 14, last week 12, last month 34. Yearly high greed 76 (May 2025), low extreme fear 5 (Feb 6, 2026). The chart shows sentiment collapsing alongside price.

Image 3: The CMC Altcoin Season Index at 32/100 (Bitcoin Season), slight uptick: yesterday 29, last week 30, last month 29. Yearly high altcoin season 78 (Sep 2025), low Bitcoin season 12 (Apr 2025).

Extreme fear often signals capitulation—historically a contrarian buy zone.

Technical Breakdowns and Outlook

1. Structure & Indicators

Structure: The market structure is strongly bearish. After losing the $70k consolidation floor, BTC experienced a cascading sell-off. It is currently testing a critical support zone around $64,300 - $65,800. High-volume red candles indicate aggressive liquidation of long positions and a shift to "sell-on-rally" sentiment.

Indicators:

• RSI: Currently in the extreme oversold territory (<30). While this suggests a potential "dead cat bounce" or temporary relief rally, the overall trend remains firmly downward.
• MACD: Deeply bearish with widening negative histograms, showing that downward momentum has not yet decelerated.
• Volume Profile: Heavy resistance is now established at the $68,000 POC (Point of Control), which previously acted as support.

2. Fundamentals & Macro

• Macro Headwinds: The market is reacting to the 15% temporary tariffs recently re-announced by the U.S. administration. This move has triggered a "risk-off" environment, hurting high-beta assets like Bitcoin.
• Monetary Policy: With the Fed holding rates at 3.50-3.75% and signaling a "higher for longer" stance to combat sticky inflation, liquidity is being sucked out of the crypto market.
• Correlation: BTC’s correlation with the Nasdaq remains high, dragging it down alongside tech stocks. Unlike Gold, which has seen safe-haven inflows, Bitcoin is currently being traded as a speculative risk asset.

3. Scenarios & Trade Plan

• Scenarios:
  • Bearish Case: A breakdown below the $64,000 psychological level will likely trigger a fast move toward the primary liquidity zone at $60,000 - $59,000.
  • Bullish Case: BTC needs to reclaim the $68,500 level on high volume to neutralize the immediate bearish pressure and aim for a recovery toward $72,000.
• Trade Plan:
  • Short Strategy: Look for entries on rallies into the $67,500 - $68,200 resistance zone. Stop Loss (SL): $70,100. Take Profit (TP): $62,000 and $60,500.
  • Long Strategy: Avoid catching the falling knife until a clear reversal pattern forms on the 4H/Daily timeframe. Only consider high-risk "scalp buys" at $64,000 with very tight stops.

1. Structure & Indicators

• Structure: ETH is in a deep bearish breakdown after decisively shattering its multi-month consolidation channel. The price has dropped over 4.7% to approximately $1,880, marking a significant technical failure. This move was accompanied by "panic volume," suggesting a forced liquidation of institutional and retail long positions.
• Indicators:
  • Stochastic RSI: Currently bottomed in the extreme oversold zone (<10), indicating that the immediate selling pressure may be exhausted, though a trend reversal is not yet confirmed.
  • Bollinger Bands: These have widened significantly, reflecting the sudden spike in volatility as the price hugs the lower band.
  • Volume Profile: Strong resistance is now concentrated at the $2,000–$2,040 area (previous Point of Control), which now acts as a formidable ceiling. 

2. Fundamentals & Macro

• Fundamentals: While the Ethereum network continues to advance with its 2026 roadmap focusing on scaling and security, immediate sentiment is weighed down by heavy ETF outflows totaling over $130M. However, these structural upgrades serve as a long-term buffer against a total ecosystem collapse.
• Macro Headwinds: Persistent inflation data has delayed expected interest rate cuts from the Fed, maintaining a high-interest-rate environment that pressures high-beta assets. Furthermore, fresh uncertainty regarding U.S. tariffs (recently raised to 15%) has triggered a broader "risk-off" sentiment across global markets. 

3. Scenarios & Trade Plan

• Scenarios:
  • Bearish Case: If ETH fails to hold the $1,800 support, a further slide toward the $1,740 February low or even the $1,600 psychological floor is likely.
  • Bullish Case: A reclaim of the $2,000 level is essential to neutralize the current bearish momentum and open the path toward $2,200.
• Trade Plan:
  • Short Strategy: Sell into relief rallies toward $1,950. Stop Loss (SL): $2,010. Target (TP): $1,750.
  • Long Strategy: Avoid aggressive buying; instead, look to accumulate in small batches at major support levels between $1,750 and $1,800 only if reversal signs appear on higher timeframes. 

1. Structure & Indicators

• Structure: SOL has experienced a severe range obliteration, plunging to $79.09 (down over 7%). The chart shows a decisive breakdown from the previous consolidation zone between $82 and $86. This vertical drop, characterized by a large "marubozu" style hourly candle, indicates an absence of immediate buyers and a complete takeover by sellers.
• Indicators:
  • EMA: A fresh death cross on shorter timeframes is accelerating the downward momentum.
  • ADX: The Average Directional Index is trending high, confirming a strong and strengthening bearish trend rather than a mere range fluctuation.
  • Volume Profile: The price has fallen below the high-volume nodes near $84. This area will now act as a major supply zone on any recovery attempt.

2. Fundamentals & Macro

• Fundamentals: Solana's high-beta nature leaves it highly exposed during market-wide deleveraging events. While the ecosystem remains active, the rapid drawdown suggests a "flight to quality" as investors exit more volatile altcoins.
• Macro Headwinds: Geopolitical tensions and the U.S. administration's 15% tariff announcement have hit high-growth assets hardest. The "higher-for-longer" Fed stance continues to drain the liquidity necessary to sustain SOL's previous premium valuations.

3. Scenarios & Trade Plan

• Scenarios:
  • Bearish Case: If the current slide continues below $75, expect a rapid descent toward the $70 - $68 liquidity pocket.
  • Bullish Case: A sustained recovery back above $85 is required to invalidate the current breakdown and aim for a retest of $90.
• Trade Plan:
  • Short Strategy: Sell into any weak bounce that stays below $82. Stop Loss (SL): $85. Target (TP): $75.
  • Long Strategy: Only consider dip buys if the price stabilizes and holds the $75–$76 region with clear bullish divergence on the RSI.

1. Structure & Indicators

• Structure: XRP has dropped to $1.3698 (down 3.75%), marking a critical support test of the lower boundary of its multi-month descending channel. The price action shows a persistent sequence of lower highs since early February, with the most recent hourly candle testing the liquidity pocket near $1.34.
• Indicators:
  • VWAP: The price is trading significantly below the Volume Weighted Average Price (VWAP), confirming a dominant bearish control over the session.
  • RSI: The Relative Strength Index is currently low (approaching oversold levels below 35), though it is attempting to form a potential bullish divergence if the $1.30 support holds.
  • Volume Profile: Heavy resistance is stacked between $1.45 and $1.50, where the most recent failed rally occurred. 

2. Fundamentals & Macro

• Macro Pressures: Sentiment is heavily weighed by trade tensions after the U.S. administration implemented a 15% temporary universal tariff. This has triggered a broad "risk-off" environment, impacting high-beta assets like XRP even as the Supreme Court recently struck down earlier emergency trade measures.
• Clarity Hopes: The market remains anchored by "CLARITY" hopes, specifically the Digital Asset Market Clarity Act (CLARITY Act). Ripple CEO Brad Garlinghouse recently expressed 90% confidence that this landmark legislation will pass by April 2026, which would provide the definitive statutory framework needed for full institutional adoption. 

3. Scenarios & Trade Plan

• Scenarios:
  • Bearish Case: A sustained break below $1.30 would likely accelerate selling toward the $1.20 - $1.15 range, a level not seen since late 2025.
  • Bullish Case: A recovery and close above $1.45 is required to break the immediate downtrend and aim for a retest of the $1.55 - $1.65 supply zone.
• Trade Plan:
  • Short Strategy: Sell on relief rallies into the $1.40 - $1.43 resistance zone. Stop Loss (SL): $1.45. Target (TP): $1.30.
  • Long Strategy: Focus on "policy longs"—accumulating near the $1.30 psychological floor only if clear reversal signals emerge, positioning for the anticipated legislative breakthrough in April.

Macroeconomic Backdrop: Geopolitical Shock, Fed Caution, and Consumer Pressures

Macro headwinds intensified dramatically. US shutdown risk by February 7 loomed large without a funding deal, while Trump escalated 100% tariff threats on Canada over border/trade disputes. China's stablecoin crackdown added pressure, and corporate tariff pain (higher costs, margin squeeze) triggered broad risk-off moves. The Fed held rates steady at 3.50%-3.75%, hawkish despite softer CPI/PCE prints, with markets pricing minimal 2026 cuts. Powell's insider probe continued; Cook emphasized inflation vigilance.

Jobs remained weak: ADP 41k, non-farm 50k (vs. 73k), unemployment 4.4%. Wages +0.3%. Student debt garnishments on $1.6T burden squeezed consumers. Real estate stagnant at 5.99% rates. Gold/silver ATHs as hedges; crypto bled alongside stocks.

Macro storms cause fear but highlight BTC's hedge role.

Institutional Inflows: Reversed to Strong Positives with Growing Adoption

Flows turned sharply negative amid panic: Bitcoin ETFs heavy outflows, Ethereum similar. But early 2026 net remained positive (+$1.2B). Solana/XRP selective inflows persisted. Balchunas noted momentum despite crash.

Bank of America recommends ETFs (1-4%). Morgan Stanley wallet mid-2026. PwC auditing expands.

Corporates: MicroStrategy, El Salvador, Metaplanet continued accumulation.

Institutional support provides floor.

Policy Wins: Regulatory Momentum Accelerates Globally

US CLARITY Act delayed but expected; Senate January 15 vote. Florida Bitcoin reserve July 2026. UK 2027 licenses. Lloyds tokenized bond buy.

Policies reduce risk for beginners.

Specific Themes: Cycle Evolution, Tokenization, and Multi-Chain Future

Bitcoin cycle debates: Flat 2025, $250k 2026 forecasts. Ethereum upgrades solve trilemma. Tokenization: Polymarket-Dow Jones, Morgan Stanley. Stablecoins +525% Visa.

Zcash team exit risks small projects.

Other News: Resilience, Upgrades, and Everyday Adoption

Discord IPO; Rumble wallet. IMF pragmatic on Bitcoin. Mining low; El Salvador adoption. Ethereum blob/gas cheaper txs. AI job impacts.

Integration continues.

Conclusion: Extreme Fear and Potential Bottom Formation

The week of February 9-23, 2026 marked one of the most severe sell-offs in recent memory, with Bitcoin crashing below $70,000 and the total market cap dropping to $2.39 trillion amid extreme fear (Fear & Greed Index at 9). Geopolitical shocks—US government shutdown risks, 100% tariff threats on Canada, and lingering US-EU tensions over Greenland—combined with the Fed's hawkish rate hold and weaker jobs data, triggered widespread panic and massive liquidations. Altcoins suffered even steeper losses, reinforcing Bitcoin's dominance in this risk-off environment.

Yet, beneath the surface, signs of resilience emerged: late-week buying at lows, continued institutional inflows (early 2026 net positive), and policy tailwinds like the anticipated CLARITY Act passage signal that fundamentals remain intact. Gold and silver hitting ATHs while crypto bled highlights BTC's evolving role as a hedge, though high-beta alts bore the brunt.

Extreme fear historically marks capitulation points—opportunities to accumulate quality assets like Bitcoin and Ethereum on deep dips. Patience is key: macro storms pass, and adoption trends (tokenization, stablecoins, upgrades) continue to build a stronger foundation.