Have altcoins given a buy signal?

Altcoins with a market cap below $10 billion may be preparing to offer “some opportunities” to investors as their trading volumes have been falling since Bitcoin hit a new high in early 2024.

“Since hitting new highs in March, smaller-cap crypto assets have been in the doldrums,” Jamie Coutts, lead crypto analyst at RealVision, 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 over the past week, it has fallen nearly 6% to $67,126.

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

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

Data from Bitformance’s cryptocurrency tracking shows that over the past three months, the top 200 equal-weighted indexes — which assign equal weight to cryptocurrencies regardless of market cap — have fallen more than 30% relative to market cap indices, where cryptocurrencies are weighted based on their market cap.

The drop shows that small-cap cryptocurrencies are outperforming the larger cryptocurrencies that dominate the market capitalization index.

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

Bitcoin is down 6.10% over the past seven days. Source: CoinMarketCap

He added that tokens associated with the metaverse recorded the lowest returns in the index over the past three months, at negative 44.13%.

In the sub-$1 billion market cap category, metaverse tokens Sandbox and Decentraland have both fallen more than 15% over the past week, according to CoinGecko.

At the same time, 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 manager did not mention which altcoins will make up the fund’s portfolio, but it did recently heap praise on the Solana network.