A prominent cryptocurrency analyst predicts that leading alternative coin projects could experience a significant surge in prices soon, driven by a crucial metric.
Jamie Coutts, the chief cryptocurrency analyst at Real Vision, recently shared his view that “high-quality” altcoins might be nearing a market bottom based on the top 200 equal weight index versus market cap ratio.
The top 200 equal weight index monitors the performance of the top 200 cryptocurrencies by market capitalization in relation to Bitcoin (BTC).
Based on historical data, Coutts suggests that certain altcoins could soon complete their correction phase and begin to reverse course.
“My small-cap or alt-sentiment chart: the top 200 equal weight index versus market cap ratio chart (top) indicates a continuation of the same trend from the previous month.
- Small-cap underperformance is currently at an extreme level (blue sub-chart), presenting opportunities for undervalued high-quality altcoins.
- Although the ratio chart trend is downward, an all-out ‘altseason’ is unlikely until there is a reversal (turns green).
- For now, small caps are expected to face challenges until BTC surpasses its all-time high (which remains my base case for this year).
Coutts also mentioned that the broader altcoin market may not begin its recovery until late 2024 or early 2025, considering the number of altcoins that are currently underperforming against the top cryptocurrency.
“Looking at another metric, my altseason indicator (number of assets outperforming BTC), we are clearly witnessing negative alt sentiment at its lowest levels, with only 11% of assets outperforming BTC in the past 90 days.
The bottoming process typically takes several months to resolve before a recovery occurs (anticipated by late Q4 or early 2025). My analysis suggests that this situation resembles the 2020 downturn compared to the end of the cycle collapse in 2022.”
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Image Credit: Midjourney