A prominent cryptocurrency analyst believes that a major altcoin project could soon see a price surge based on one key indicator.
Jamie Coutts, senior cryptocurrency analyst at Real Vision, says “high-quality” altcoins may be approaching a market bottom, based on their market cap to top 200 equally-weighted index ratios.
The Top 200 Equal Weighted Index tracks the performance of the top 200 cryptocurrencies by market cap against Bitcoin (BTC).
He said that based on historical precedent, some alternatives could soon be corrected and reversed course.
“My small cap or alternative sentiment chart: The top 200 equal weight index vs market cap ratio chart (above) shows the same theme continuing from last month.
- Small cap underperformance is extreme (blue sub-chart). Yes, this is an opportunity for washed-out, high-quality alternative stocks.
- While the ratio chart trend is down, a full ‘replacement season’ is not possible until a reversal (turning green) occurs.
- For now, small caps will struggle until BTC hits an all-time high (which is still our baseline scenario for the year).”
The analyst also said that it could take until late 2024 or early 2025 for the overall altcoin market to recover, based on the number of underperforming altcoins compared to the top cryptocurrencies.
“Another lens, my altseason indicator (number of assets outperforming BTC). Again, we are clearly at a washed out level of negative alt sentiment, with only 11% of assets outperforming BTC over the last 90 days.
Typically, the bottoming out process takes several months before recovery begins (estimated late Q4 or early 2025). In my analysis, this is similar to the 2020 vomit and 2022 end-of-cycle crash.”
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