Altcoins
Expect opportunities within small and mid-cap Altcoins once the correction settles: analyst Jamie Coutts
Cryptocurrency analyst Jamie Coutts says the current correction in digital assets is likely a mid-cycle dip that could be taken advantage of.
Coutts says on social media platformBTC) and Ethereum (ETH) have held up much stronger than other crypto assets, implying that potential mean reversion is possible for smaller projects.
“Small-cap crypto assets have taken it on the chin since the high in March this year. Over the past three months, the equal-weighted Top 200 index has fallen 33% compared to the market cap index, which is down about 12%.
Here is the breakdown of three-month sector returns from my crypto classification framework:
Smart contracts platform -31.58%
Infrastructure -43.28%
Digital world -44.13%
Digital currency -31.59%
Challenge -31.15%
Applications -38.33%
BTC and ETH held up -11% and 5% respectively.
If this is a regular mid-cycle correction that we are experiencing, which I think is likely, then expect opportunities to present themselves in mid and small caps once the market recovers. will be stabilized.
Source: Jamie Coutts/X
When the rebound occurs, Coutts said Decentralized artificial intelligence (AI) is another sector that offers “real opportunities,” but the analyst does not mention any specific plays or projects.
Coutts also shares a chart comparing a falling price index of layer 1 smart contract platforms to an increasing number of their daily active users (DAU). The analyst suggests that divergence is one of the best health signals in the crypto ecosystem.
“Web3 users seem less price sensitive than in the previous cycle.
The number of daily active addresses (DAUs) on smart contract platform (SCP) blockchains has increased by 30% since March, while the SCP sector index is down around 30%.
A sign of how wild the last cycle has been, prices are 37% below the all-time high, but DAUs are 2.6 times higher (4.2 million to 11.2 million).
One is not equal to the other, but if you are looking for a signal about the health of the crypto ecosystem, this is one of the best.
Source: Jamie Coutts/X
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