As an experienced analyst, I’ve seen my fair share of market ups and downs, especially in the crypto space. The recent decline in crypto markets, with smaller cap digital assets taking the brunt of the hit, is nothing new to me. In fact, as Jamie Coutts, the chief analyst at Real Vision, pointed out, this altcoin correction has been going on for months.
As a market analyst, I’ve observed that the cryptocurrency sector has experienced a significant setback within the last week, with prices dropping by over 5%. Approximately $150 billion in value has departed from this market segment. The brunt of these outflows appears to have affected low-capitalization digital assets.
Jamies Coutts, Real Vision’s chief analyst, notes that the downturn in the altcoin market has persisted for several months now.
In a post on X on June 13, he stated that smaller cryptocurrencies have been bearing the brunt since the peak in March of this year.
As a crypto investor, I’ve noticed an intriguing trend in the market over the past three months. Specifically, the “Top 200 equal weight index” has experienced a significant decline of approximately 33%, while the “Market Cap index” has dropped around 12%. This suggests that the smaller cryptocurrencies within the Top 200 have underperformed compared to the larger ones in the market. It’s essential to keep an eye on these developments and consider adjusting investment strategies accordingly.
No Altseason In Sight
As a researcher, I delved deeper into the data by examining the sectors individually. Notably, infrastructure and applications experienced a significant decline of approximately 40% since March. On the other hand, smart contracts, cryptocurrencies, and Decentralized Finance (DeFi) assets witnessed a decrease exceeding 30%.
If we’re dealing with a typical mid-cycle correction, there could be profitable chances in the mid and smaller capitalization stocks when the market stabilizes.
In the past three months, smaller cryptocurrency assets in the Top 200 by market capitalization have experienced significant losses compared to the broader market. Specifically, this equal-weighted index has declined approximately 33%, whereas the market cap index has dropped around 12% since reaching peaks in March of this year.
This is the breakdown of the 3-month sector returns…
— Jamie Coutts CMT (@Jamie1Coutts) June 13, 2024
In spite of evidence indicating that inflation in the United States is easing, altcoins have persisted in their severe price decline. According to Bankless’ communication to investors on June 13th, 70 out of the top 100 tokens experienced a drop of over 10% within the week, and 20 of these tokens even fell by more than 20%.
The cryptocurrency market as a whole has experienced a decrease of approximately 11.5% from its peak total capitalization value of $2.89 trillion, which was reached in mid-March.
In my analysis sent to investors on the 14th of June, I forecasted further discomfort based on current market trends as FxPro’s senior market analyst.
The need for risk assets is decreasing, resulting in successive lower peaks during intraday trading. Nevertheless, a stable support level exists around the $2.42 trillion mark, which was also a pivotal point for market stabilization from May 17th to 20th.
Altcoin Pain Is Normal
On June 13th, cryptocurrency market analyst ‘Jelle’ noted that Bitcoin is just a 9% decrease away from reaching its peak price. In contrast, altcoins currently stand approximately 70% below their own record highs. However, he remarked casually, “this is typical.”
“As soon as BTC enters price discovery, alts will rally hard,” they added.
Seeing lots of people talk about how bad altcoins are doing compared to Bitcoin.
As a researcher studying the cryptocurrency market, I’ve noticed that Bitcoin currently sits about 9% below its all-time high, while altcoins trail behind with values around 75% of their respective peaks. However, this isn’t an unusual occurrence – it’s reminiscent of the trends we observed in 2020. In the past, Bitcoin has often paved the way for market movements, with altcoins following suit.
As soon as BTC enters price discovery, alts will rally hard.
— Jelle (@CryptoJelleNL) June 13, 2024
Moustache, the technical analyst, presented a more pessimistic view regarding altcoins. He noted that these cryptocurrencies have been experiencing a downturn since reaching their highest points in the previous market peak, which occurred in 2021.
In simpler terms, the love for alternative cryptocurrencies isn’t likely to grow significantly until Bitcoin manages to break free from its price range it has been stuck in since early March.
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2024-06-14 13:10