- Crypto markets experienced a significant downturn over the past week, with a 5% overall decline and a staggering $150 billion outflow.
- This downturn has been particularly severe for smaller-cap digital assets, illustrating a broader trend observed since March.
- According to Jamie Coutts, a chief analyst at Real Vision, “Smaller cap crypto assets have been hit hard since their peak in March,” as noted in a recent post on social media.
Discover the latest insights into the crypto market downturn, unpack the key sectors affected, and explore potential opportunities amidst the current market correction.
No Altseason In Sight
Analyst Jamie Coutts highlighted distinct declines across various sectors, noting infrastructure and application-related cryptocurrencies dropped nearly 40%, while smart contract, currency, and DeFi assets decreased by over 30% since March. Such drops indicate that an ‘altseason’—a period of rapid appreciation in altcoins compared to Bitcoin—is unlikely in the near term. However, Coutts suggested potential for mid and small-cap assets to rebound once market conditions stabilize.
Persistent Decline in Smaller Cap Assets
Despite signals of easing inflation in the U.S. economy, altcoins have continued their downward trend. Bankless noted in a June 13 report that 70 out of the top 100 tokens dropped more than 10% within the past week, with 20 losing over 20% in value. This trend contributed to an overall 11.5% market decline from a high of $2.89 trillion in mid-March.
Altcoin Pain is Normal
Crypto market analyst ‘Jelle’ indicated that while Bitcoin is only 9% away from its all-time high, altcoins remain approximately 70% below their peaks. Jelle attributed this to the historical pattern where Bitcoin leads market movements, with altcoins following subsequently. Jelle’s perspective maintains an optimistic outlook for altcoins, anticipating sharp rallies once Bitcoin enters a new price discovery phase.
Technicals Suggest Continued Struggle for Altcoins
Technical analyst ‘Moustache’ provided a more somber view, observing that altcoins have been on a downward trajectory since peaking in the last bull cycle of 2021. Moustache posited that altcoins are unlikely to see significant gains until Bitcoin manages to break out of its current trading range, established since early March.
Conclusion
In summary, despite a sharp decline in smaller-cap digital assets and no immediate signs of an altseason, analysts remain divided on the short-term outlook for crypto markets. While mid and small-cap opportunities might emerge once market turbulence dissipates, the broader trend suggests continued caution. As Bitcoin approaches its all-time highs, the hope remains that altcoins will eventually follow, affirming the historical patterns of market behavior.
