In the East 8 time zone, mid-February 2026, the sentiment in the crypto market is cold following a significant pullback, but Coinbase's ledger presents a drastically different picture: the native unit balances of BTC and ETH in retail accounts are not decreasing but increasing. Coinbase CEO Brian Armstrong publicly stated around February 15 that retail users on the platform have "been buying Bitcoin and Ethereum on dips," and cited internal data indicating that the majority of customers held higher BTC/ETH balances in February 2026 than in December 2025, which was later cross-verified by several media outlets including Golden Finance and Planet Daily. A price downturn would typically trigger stop-losses and reductions in holdings, but the data recorded a continuous accumulation by retail investors, creating the most intriguing question of the current cycle: is this a calm contrarian layout, or a slow unfolding of passive "lock-up"?

The Ledger Doesn't Lie: Retail Balances Rise Against the Trend

● Trend Comparison: Based on the temporal anchor of "February 2026 vs December 2025", Coinbase conducted a comparison of retail BTC and ETH native unit balances. The results show that after experiencing a price drawdown in January and February, the overall number of coins held by retail users on the platform did not decrease but instead steadily increased, especially noticeable in the balances of the two main assets, BTC and ETH. This is not merely a case of a few large players skewing the average; rather, it reflects a broad trend across retail accounts.

● Key Facts: Armstrong emphasized in his public statement that "the majority of customers' BTC/ETH balances are higher in February this year than at the end of last year". This statement has been verified by media outlets such as Golden Finance and Planet Daily based on public materials and interviews, establishing it as a core fact that can be cited. In the absence of more granular data, the term "majority" is sufficient to indicate direction—during this round of drawdown at the beginning of the year, Coinbase retail investors are not retreating as a group, but are instead using more capital to hedge against the pressures caused by falling prices.

● Exchange Perspective: The ability to reflect retail behaviors from exchange ledgers is fundamentally based on the combination of exchange addresses and on-chain deposit and withdrawal records. As a compliant platform, Coinbase pools user assets in a limited number of clearly identifiable cold and hot wallets, maintaining a relatively stable correlation between on-chain transfer records and changes in internal accounts. Although we cannot analyze individual user profiles, from an aggregate standpoint, the increase or decrease in balances on the exchange remains one of the important windows for observing overall retail risk preferences, holding periods, and whether to "get in or get out."

Price Pullback First, Retail Accumulation After

● Sentiment Background: During the drawdown period from early 2026 into February, the mainstream expectation within the media and community regarding the future market was evidently leaning towards caution and even pessimism. The discussion quickly shifted from "when will new highs come" to "when will this round of decline bottom out," with voices on social platforms advocating for risk control, reductions in holdings, and wait-and-see sentiments. Interpretations in analysis articles regarding macroeconomic variables, liquidity, and regulatory aspects generally carried a bearish tone. In this narrative environment, price declines were almost viewed as a "consensus," accumulating panic and fatigue.

● Behavioral Discrepancy: However, the ledger provided by Coinbase reveals another reality: during the price pressure phase, retail users on the platform chose to increase their holdings rather than retreat. While the public discourse focused more on "whether prices will continue to fall," retail investors executed reverse operations with real capital, casting a different vote against mainstream expectations. This mismatch of "pessimistic talk but accumulation" created tension between market narratives and capital flows, raising an important question—who is really leading the redistribution of chips after this round of price dips?

● Explanation Framework: Understanding this phenomenon can only remain at the framework level rather than asserting motives. Firstly, the strategy of regular investment and long-term allocation has been reinforced by many compliant platforms and financial education content in recent years. For some users, price pullbacks within a range merely represent predetermined plan execution points. Secondly, retail expectations for the future may not align with short-term narratives; a significant portion may be more focused on risk-return ratios over multiple quarters or even years. Thirdly, the user structure of compliant platforms is inherently different from high-leverage and high-frequency trading groups, more inclined towards spot holdings and medium to long-term allocations. These factors combined create a unique picture during the pullback: "bearish sentiment but increasing positions."

Institutions Defend While Retailers Attack: Different Stances of Two Types of Capital

● Institutional Cases: Compared to the contrarian accumulation on the retail side, institutions during the same period emphasized a "defensive posture." On February 16, 2026, Strategy Company publicly stated that its assets were sufficient to cover relevant debts in a scenario where BTC prices drop to $8,000. The core of this statement is not predicting that Bitcoin will definitely fall to that level, but rather communicating a signal to creditors and the market: even in extreme market conditions, the company's balance sheet still has enough safety margin, and cash flow and debt repayment capacity will not get out of control.

● Path Differences: A rough comparison of capital behaviors reveals a divergence in strategies during this round of drawdown: institutions attempt to block the worst scenarios through stress tests and asset coverage declarations, prioritizing stabilization of their defenses; while retail users on Coinbase continuously accumulate BTC and ETH during price declines, resembling a shift towards offensive positions on the same map. The former focuses more on payment capacity and liquidity redundancy during valuation retracement, while the latter attempts to amplify potential future rebound returns with new capital. The two paths intertwine within the same round of drawdown, creating an invisible "bull-bear game."

● Role Division: This difference stems from the deep-rooted distinctions in risk tolerance, capital costs, and decision cycles. Most retail customers on compliant exchanges participate with their own funds, generally with limited leverage; their capital costs are mainly reflected in opportunity costs and emotional pressures, allowing decision-making rhythms to align more closely with personal subjective judgment. In contrast, off-exchange institutions often bear multiple commission responsibilities and compliance constraints; their capital structures may include liabilities and mismatched durations, necessitating the maintenance of liquidity and credit ratings under pressure scenarios. Thus, within the same price range, retail investors find it easier to try "buying on dips," while institutions tend to focus more on ensuring "not being overwhelmed by market conditions." Driven by different objective functions, these two types of capital complete a division of roles during this round of drawdown.

From Speculation to Holding: The Slow Migration of LTH and STH

● Concepts and On-chain Reflection: In the on-chain analytical framework, Long-Term Holders (LTH) and Short-Term Holders (STH) are typically distinguished by how long assets have been held: tokens that remain unmoved for a long time fall into the LTH category, while frequently circulated tokens are classified as STH. Exchange balances themselves do not directly provide clear boundaries for these two groups, but when we observe retail investors continuously increasing their holdings of BTC and ETH during the pullback, it indicates that more chips are being "locked" in centralized platform accounts, leaving room for future migration to long-term holding status.

● Narrative Prediction: If we view this period as a starting point, we can develop such a narrative: when prices weaken and sentiments cool, some retail investors choose to continue accumulating on Coinbase without rushing to exit. If these new holdings maintain low movement frequencies in the following months, they will gradually "age" in on-chain statistics, transitioning from short-term tokens to a new batch of long-term tokens. In other words, this round of drawdown might not just be a price reset interval but also a phase for building new foundational long-term positions, although this evolutionary path still requires time and more data for validation.

● Data Boundaries: It is essential to emphasize that we currently lack detailed stratification regarding differential user behaviors across various asset scales or regions, nor do we have complete on-chain slices that accurately map every change in exchange balances to corresponding LTH/STH conversions. Therefore, discussions about structural evolution can only remain at directional and interval judgments rather than precise measurements. We can describe a "possible trend of increasing long-term holding proportions" but cannot provide a specific percentage increase; this reflects both a boundary in data methodology and constraints that narratives must consciously adhere to.

Token Frenzy Eases, Funds Flow Back to Bitcoin and Ethereum

● Sentiment Reversal: During the simultaneous price pullback, there was also a collective reflection within the crypto community on the high-risk token economic models. DefiLlama founder 0xngmi proposed the viewpoint that "the death probability of issued token projects is 50% higher than that of unissued projects" (drawing from a single source), which, while lacking exhaustive statistical breakdowns, serves effectively as a sentiment indicator—markets began to show obvious fatigue and skepticism towards projects wrapped in narratives of "complex token design," yet lacking substantial products and cash flow support.

● Narrative Cooling: Around this viewpoint, discussions within the community regarding "overly complex token designs deviating from product first principles" continued to evolve. Many commentators began to reassess: when the focus of project narratives shifts from actual use cases to clever incentive curves and game-theoretic structures, participants are bearing the risk of technological innovation or simply the risks of a Ponzi-like unraveling. This change in public sentiment resulted in a "downshift" in speculative narratives, causing mainstream capital's appetite for "new stories and new tokens" to decrease temporarily.

● Flow Back to Mainstream Assets: Against this backdrop, the choice of Coinbase retail investors to increase holdings of BTC and ETH during the pullback gains clearer interpretative coordinates. Rather than investing in new categories with high uncertainty, it is more sensible to return to mainstream verified assets like Bitcoin and Ethereum in search of a form of "certainty and risk aversion." This does not mean completely abandoning high-risk, high-return opportunities, but represents a structural rebalancing of asset allocation as the speculative frenzy recedes: increasing weight on assets with deep liquidity, strong network effects, and clear consensus foundations, rather than continuing to leverage in new token categories.

Who Is Lurking for the Next Cycle?

This round of drawdown in 2026 is weaving a multi-layered puzzle of capital behaviors: the weakening on the price end and caution on the narrative end serve as surface layers; the counter-trend accumulation by retail investors recorded by the Coinbase ledger forms the middle layer; institutional highlights like Strategy Company emphasizing asset-liability safety margins through statements like "able to cover the $8,000 BTC scenario" build the underlying solid defense. Together, these three elements indicate that the current market is not driven by a single logic, but rather by the intersection of diverse risk preferences and decision constraints occurring within the same temporal coordinates.

As we look back at this period, it is hard not to raise an open-ended question: Is today's contrarian accumulation by retail investors on Coinbase an early capital ambush for the next upward cycle, or a new cognitive experiment against risks, volatility, and narratives? If prices rise again, those slowly accumulated holdings during the drawdown could later be interpreted as "smart money"; if the market remains flat or continues to explore lower levels for a long time, these positions could also be seen as a collective lesson in risk pricing.

Going forward, what truly deserves attention are several evolving clues: first, whether more exchanges and on-chain data can confirm the retail accumulation picture presented by Coinbase, or reveal structural differences between platforms; second, whether the ratio of LTH to STH will continue to tilt towards long-term across multiple chains, whether a new round of "strong hands taking over weak hands" in chip redistribution will emerge; third, how the regulatory process and product innovations will reshape capital behavior—whether from spot ETFs to new custody and risk management tools will lead to new synergies and divisions of labor between compliant retail and institutions in the next phase. The answers remain to be seen, but it is certain that the ledger has left a clear timestamp, and the future cycles, regardless of direction, will be reinterpreted from here.