Have altcoins given a buy signal?

Author: Ciaran Lyons, CoinTelegraph; Compiler: Tao Zhu, Golden Finance

Altcoins with a market value of less than $10 billion may be preparing to offer investors "some opportunities" as their trading volumes have been falling since Bitcoin hit a new high in early 2024.

"Since hitting a new high in March this year, smaller market capitalization crypto assets have been in a slump," RealVision chief crypto analyst Jamie Coutts wrote in a June 13 X post.

According to Cointelegraph Markets Pro, BTC hit an all-time high of $73,679 on March 13 - but in the past week, it has fallen nearly 6% to $67,126.

Coutts added: “If this is a routine mid-term correction that we experience, which I believe is possible, then expect some opportunities to emerge in mid- and small-cap cryptocurrencies once the market stabilizes.”

The equal-weight index fell 33% relative to the market capitalization index. Source: Jamie Coutts

Bitformance’s cryptocurrency tracking data shows that the top 200 equal-weighted index (which assigns equal weight to cryptocurrencies regardless of market cap) has fallen more than 30% over the past three months relative to the market cap index, where cryptocurrencies are weighted based on their market cap.

The decline suggests that small-cap cryptocurrencies have outperformed the larger cryptocurrencies that dominate the market cap index.

Meanwhile, Coutts noted, Bitcoin and Ethereum have only experienced declines of 11% and 5%, respectively, over three months.

Bitcoin has fallen 6.10% over the past seven days. Source: CoinMarketCap

He added that tokens related to the Metaverse have recorded the lowest return in the index over the past three months, at negative 44.13%.

In the category with a market capitalization of less than $1 billion, Metaverse tokens Sandbox and Decentraland have both fallen by more than 15% over the past week, according to CoinGecko.

Meanwhile, institutional investors are also growing interested in assets other than Bitcoin and Ethereum.

On June 6, Franklin Templeton said it was exploring a new crypto fund for institutional investors to invest in altcoins.

The asset management company did not mention which altcoins would make up the fund’s portfolio, but it did recently give a big thumbs up to the Solana network.