A new analysis on the crypto market suggests that the performance of different segments within the industry can vary significantly. The market is often divided into two main segments: large-cap ecosystems such as Bitcoin (BTC) and Ethereum (ETH), and the rest of the market, known as “altcoins.”
One of the key tools used to analyze these segments is the alts signal, which offers a granular view by comparing the market cap of all cryptocurrencies excluding BTC and ETH to the total crypto market cap. The signal, which moves within a range of 0 to 1, provides insight into the relative performance of altcoins against the broader market.
Different scenarios can be identified based on the movement of the alts signal and BTC. For example, a rising alts signal along with BTC may indicate a broad-based bull rally across the market, prompting investors to consider increasing their positions in altcoins. On the other hand, a declining alts signal alongside BTC could signal a market downturn, leading investors to de-risk by reallocating to stablecoins or other assets.
In recent months, the alts signal has experienced significant volatility, dropping to a generational buy level of 0.0301 by the end of April. This suggests that investors may be accumulating altcoins due to potential undervaluation or market apprehension.
Meanwhile, Bitcoin has seen a price rise this year driven by institutional adoption, while altcoins have not kept pace. This discrepancy could indicate a brewing period where altcoins are poised for significant movements once market sentiment shifts in their favor.
The alts signal is currently at a new low below 0.1, historically signaling a good opportunity to accumulate altcoins with the expectation of a potential rally in the future. The analysis, developed by analyst @cryptokoryo using data from Dune Analytics, suggests that the altcoin market may be gearing up for an upward movement in the near term.
