Crypto investment funds began 2026 facing losses and adopting cautious strategies, as revealed by a survey conducted on February 18 by Presto Research and Otos Data.
The findings highlight a shift among investors toward relative-value and market-neutral approaches, driven by ongoing macroeconomic uncertainties and volatile price movements that have dampened directional trading confidence.
Market-Neutral Strategies Gain Ground While Directional Approaches Falter
Presto’s data indicates that liquid crypto hedge funds experienced an average decline of 1.49% in January. This downturn extends a challenging period for active fund managers, marking the fourth straight month of negative returns across both fundamental and quantitative strategies — a trend not observed since late 2018 to early 2019.
Diving deeper into the figures reveals contrasting performances: fundamental funds saw their value drop by approximately 3.01%, while quantitative funds decreased by around 3.51%. Conversely, market-neutral funds—designed to capitalize on price discrepancies rather than overall market direction—posted gains near 1.6%. Over the past six months, these neutral strategies have risen close to 5%, whereas fundamental approaches have declined over 24%.
During this timeframe, major cryptocurrencies also suffered notable losses: Bitcoin (BTC) fell roughly 31%, Ethereum (ETH) dropped about 23%, and Solana (SOL) plunged nearly 47%.
Additional analysis from other observers corroborates this fragile environment. Alphractal’s data shows Bitcoin trading within a stress zone characterized by weaker holders selling off while long-term investors continue accumulating positions. Joao Wedson, founder of Alphractal, noted that profit levels for long-term holders remain positive—a potential indicator that the market has yet to reach its ultimate turning point.
Cautious Positioning Prevails Over Panic Among Traders
The flow analysis from Presto’s survey illustrates evolving trader behavior throughout January. The month started with optimistic positioning and increased call option purchases; however, as upward momentum faltered, traders shifted toward tactical fading strategies. By mid-January’s third week, downside hedging became predominant amid fluctuating ETF flows—periods of inflows were counterbalanced by miner sell-offs and large whale distributions. Corporate buying persisted but was insufficient to offset widespread risk reduction efforts.
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The report importantly highlights that end-of-month positioning did not reflect outright capitulation; protection measures were in place but leverage appeared more controlled compared to October 2025’s chaotic reset event.
This lack of broad panic suggests stress is concentrated in specific areas rather than manifesting as systemic liquidations—a crucial distinction when evaluating whether January signals continuation or exhaustion within the bear cycle.
The analysts recommend caution until clearer policy directions emerge or significant crypto-specific catalysts arise; under such conditions rallies are expected to weaken while volatility remains sensitive to headline risks. Adaptability rather than strong conviction will likely be key for survival during Q1 2026.
Whether January represents ongoing bearish momentum or an exhaustion phase remains uncertain at this stage—but current evidence favors relative-value focused tactics successfully navigating today’s turbulent landscape over directional bets.