Anticipate Opportunities Among Small and Mid-Cap Altcoins After Market Correction, Advises Analyst Jamie Coutts
Crypto analyst Jamie Coutts suggests that the ongoing correction in the cryptocurrency market presents a chance for investors to capitalize on potential gains. Coutts notes that while major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) have maintained relatively stable prices, smaller projects have experienced significant downturns. This discrepancy could indicate a pending mean reversion, offering opportunities for mid and small-cap altcoins once the market stabilizes.
Coutts points out that smaller cap crypto assets have seen a notable decline since the peak in March this year. Over the past three months, the Top 200 equal weight index has fallen by 33%, compared to a 12% drop in the Market Cap index. According to Coutts’ crypto classification framework, various sectors, including Smart Contract Platforms, Infrastructure, Digital World, Digital Currency, DeFi, and Applications, have experienced negative returns.
While Bitcoin and Ethereum have only seen price decreases of 11% and 5% respectively, Coutts believes that this correction is part of a regular mid-cycle correction that the market typically experiences. Therefore, once the market settles, there is potential for significant opportunities within the mid and small-cap altcoin space.
Coutts further highlights decentralized artificial intelligence (AI) as a sector that offers genuine opportunities when the market rebounds. However, the analyst does not specify any particular coins or projects within this sector.
Additionally, Coutts shares a chart showcasing the divergence between the declining price index of layer-1 smart contract platforms and the increasing number of their daily active users (DAUs). The analyst believes that this discrepancy serves as a strong indicator of the crypto ecosystem’s health. Coutts notes that despite a 30% decrease in the smart contract platform sector index, the number of daily active addresses (DAUs) on these platforms has risen by 30% since March. This demonstrates that web3 users are less price-sensitive than in previous market cycles.
In conclusion, Coutts suggests that although prices are currently below the all-time highs, the larger user base reflects a healthier crypto ecosystem. Therefore, investors should consider this as a positive signal when evaluating potential investment opportunities.
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