Real Vision analyst Jamie Kautz says altcoins are likely to repeat the explosive mania of 2020 and 2021.
Coutts told social media platform X that the cryptocurrency market cycle is currently seeing “selective high-quality assets bottoming out and will outperform once the bull market resumes.”
The analyst shares a chart comparing the performance of the top 200 crypto assets to the total crypto market cap, which he uses to gauge the strength of altcoins.
He noted that the indicator is similar to the late 2020s, when Bitcoin (BTC) outperformed the broader market for months, while global liquidity appears to be increasing. Kutz said both of these factors are driving altcoins.
“I posted this chart before. Top 200 Equal Weighted Index (EQW) vs Market Cap (Mkt Cap). The crazy altcoin rally of 2020/21 came after a severe underperformance (aka BTC rally). The setup is similar as global liquidity starts to pick up… which should propel BTC to a new ATH. BTC is lagging global M2 which is starting to accelerate into the uptrend after a long pause.”
Elaborating further on his outlook for the next altcoin cycle, the analyst said that “high-quality” Layer 1s (L1s) will outperform the majority of the market in the coming expansion.
“The elements and progression of a broad altcoin rally are generally as follows:
1. Extremely overvalued, unloved, and unowned.
2. Global liquidity increases in a meaningful way
3. BTC needs to generate massive returns for weak holders to be able to recycle their profits into alts.
4. These gains are likely to further strengthen the already strong performing Alt.
This article is not an endorsement of blindly investing in the speculative side of the market. I am simply stating my opinion based on the current situation.
Some assets will outperform the broader shitcoin rally. These are high quality L1s that are growing and building new, sticky use cases.”
Don’t miss out – subscribe to receive email notifications straight to your inbox
Price check task
Follow us XFacebook and Telegram
Surfing the Daily Hodl Mix
 
Disclaimer: The opinions expressed on The Daily Hodl are not investment advice. Investors should do their own due diligence before making any high-risk investment in Bitcoin, cryptocurrencies or digital assets. Your transfers and transactions are at your own risk and any losses you may incur are your own responsibility. The Daily Hodl does not recommend buying or selling cryptocurrencies or digital assets and The Daily Hodl is not an investment advisor. The Daily Hodl participates in affiliate marketing.
Featured image: Shutterstock/Comdas/INelson