Crypto analyst Jamie Coutts believes that the current downturn in digital assets could present a unique opportunity for investors. Posting on X, Coutts highlights that Bitcoin (BTC) and Ethereum (ETH) have shown resilience compared to other cryptocurrencies, hinting at a potential reversal for smaller projects.
“Smaller cap cryptocurrencies have been struggling since the peak in March. Over the past three months, the Top 200 equal weight index has dropped by 33% while the Market Cap index is down by around 12%. Here’s a breakdown of the sector returns from my crypto classification system:
– Smart Contract Platform: -31.58%
– Infrastructure: -43.28%
– Digital World: -44.13%
– Digital Currency: -31.59%
– DeFi: -31.15%
– Applications: -38.33%
BTC and ETH have only declined by 11% and 5% respectively. If this is a typical mid-cycle correction, as I suspect, there could be promising opportunities in mid and small cap projects once the market stabilizes.”
When the market rebounds, Coutts suggests that decentralized artificial intelligence (AI) could be a promising sector, without specifying any particular coin or project. He also shares a chart comparing the declining prices of layer-1 smart contract platforms with the increasing number of daily active users (DAUs), indicating a positive signal for the crypto ecosystem.
“The increase in daily active addresses on smart contract platforms has surged by 30% since March, despite the sector index declining by 30%. Prices may be down from the all-time high, but DAUs are significantly higher. This divergence could be a strong indicator of the crypto ecosystem’s health.”
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