A widely followed crypto analyst believes major altcoin projects could soon reach higher prices based on a key metric.
Jamie Coutts, chief cryptocurrency analyst at Real Vision, says “high-quality” altcoins could be approaching a market floor based on the top 200 equal-weight index to market cap ratio.
The Top 200 Cryptocurrencies Equal Weight Index tracks the performance of the top 200 cryptocurrencies by market capitalization relative to Bitcoin (BTC).
He suggests that based on historical precedent, some altcoins may soon complete their correction and reverse course.
“My small-cap or alternative sentiment chart: The chart of the equal weight ratio of the top 200 indices to market capitalization (top) shows a continuation of the same theme from last month.
- Small cap underperformance is extreme (blue subchart). Yes, opportunities for high quality alts that have been washed out.
- Although the trend of the ratio chart is downward, until there is a reversal (turning green), a large-scale “alternative season” is not possible.
- For now, small caps will struggle to hold until BTC breaks its all-time high (which remains my base case for this year).
The analyst also says the broader altcoin market may not start to recover until late 2024 or early 2025, depending on how many altcoins underperform the leading crypto asset.
“Another target, my altseason indicator (number of assets outperforming BTC). Again, we are clearly at washed out negative alt sentiment levels with only 11% outperforming BTC over the last 90 days.
“Typically, the bottoming process takes months to unwind before a recovery (expected to occur in late Q4 or early 2025). My analysis shows this looks like the 2020 vomit versus the 2022 late-cycle collapse.”
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