Real Vision analyst Jamie Coutts says altcoins could be on the verge of repeating the explosive mania of 2020 and 2021.
Coutts says on social media platform X that the cryptocurrency market cycle is currently at a point “where selective, high-quality assets are bottoming out and will outperform when the uptrend resumes.”
The analyst shares a chart that compares the performance of the top 200 crypto assets against the total cryptocurrency market cap, which he uses to gauge the strength of altcoins.
He notes that the metric is similar to late 2020, when Bitcoin (BTC) outperformed the rest of the market for months, while at the same time an increase in global liquidity appears to be underway — two things that Coutts says are bullish for altcoins.
“I have posted this chart before. Chart of the top 200 Equal Weight Index (EQW) vs. Market Cap Ratio (Mkt Cap). The insane altcoin rally of 2020/21 came after severe underperformance (aka BTC rally). The setup is similar as we start to see global liquidity increase… which should drive BTC to new ATHs. BTC is lagging the global M2, which is starting to accelerate higher after a long pause.”
The analyst further elaborates on his outlook for the next altcoin cycle, saying that “high-quality” Layer 1s (L1s) will outperform much of the market in an upcoming expansion.
“The ingredients and progression of a broad altcoin rally are typically as follows:
1. Being extremely oversold, unloved, underestimated
2. Global liquidity increases significantly
3. BTC must generate outsized returns for weak holders in order to recycle profits into Alts
4. These profits will likely boost already outperforming Alts…
This is not a recommendation to blindly invest in the speculative segment of the market; it is simply how I see things evolving based on the current situation.
Some assets will outperform ahead of the broader shitcoin rally. These are the high-quality L1s that are growing and creating new and compelling use cases.
Don’t miss a thing – Subscribe to receive email alerts directly to your inbox
Check price
Follow us on XFacebook and Telegram
Surf the Daily Hodl Mix
 
Disclaimer: Opinions expressed on The Daily Hodl are not investment advice. Investors should do their own due diligence before making any high-risk investments in Bitcoin, cryptocurrencies or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Comdas/INelson
