Relative-Value Strategies Beat Directional Bets as Crypto Volatility Bites
Crypto funds opened 2026 with losses and defensive positioning, based on a February 18 survey by Presto Research and Otos Data.
The report exhibits traders shifting towards relative-value and market-neutral trades as macro uncertainty and value swings weigh on directional bets.
Market-Neutral Funds Outperform as Directional Strategies Sink
According to Presto’s survey, all liquid crypto hedge funds dipped by a median of 1.49% final month. The losses prolonged a troublesome stretch for energetic managers, marking the fourth consecutive month of detrimental equally weighted efficiency throughout each basic and quantitative classes, a sequence not seen since late 2018 and early 2019.
The dispersion inside the numbers tells a clearer story, with basic funds dropping 3.01% in January, whereas quantitative funds fell 3.51%. On the opposite hand, Presto revealed that market-neutral funds, which intention to revenue from value variations reasonably than market course, gained about 1.6%. Over six months, those self same impartial methods are up practically 5% whereas basic funds are down greater than 24%.
During that very same interval, Bitcoin (BTC) has fallen roughly 31%, Ethereum (ETH) 23%, and Solana (SOL) 47%.
Analysis by different market watchers helps the delicate tone, with information from Alphractal showing that Bitcoin was buying and selling in a stress zone the place weaker holders are likely to promote whereas long-term traders accumulate. The agency’s founder, Joao Wedson, said long-term holder revenue ranges are nonetheless optimistic, an indication the market might not but be at a ultimate turning level.
Positioning Data Points to Defensive Posture, Not Panic
The Presto survey’s circulation evaluation exhibits a transparent behavioral arc by January. The month opened with constructive positioning and name shopping for, however as rallies failed, merchants rotated into tactical fade buildings. By the third week, draw back hedging grew to become dominant, as ETF flows fluctuated, with intervals of influx offset by miner distribution and whale promoting. Meanwhile, company accumulation remained current however inadequate to offset broader danger discount.
Importantly, the report famous that positioning into the month-end was not outright capitulative. The analysts acknowledged that whereas safety was in place, the leverage appeared extra orderly in comparison with the chaotic reset occasion in October 2025.
The absence of broad panic means that stress is constructing in pockets reasonably than being expressed as systemic liquidation. This distinction issues as the market assesses whether or not January represents continuation or exhaustion.
The researchers suggested that till coverage readability improves or a structural crypto-specific catalyst emerges, rallies are prone to fade, volatility will keep reactive to headline danger, and flexibility reasonably than conviction will decide survival within the first quarter of 2026.
Whether January marked a continuation of the bear development or the exhaustion part of promoting stress stays an open query. However, at current, the information point out that methods that prioritize relative worth over directional conviction are efficiently navigating the present challenges.
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