One Metric Flashing Bullish Signal for High-Quality Altcoins Amid ‘Bombed Out’ Sentiment, Says Crypto Analyst

Real Vision’s chief crypto analyst, Jamie Coutts, is leaning bullish on altcoins despite the prevailing bearish sentiment.

Coutts says that sentiment is “so bombed out”, as evidenced by the ratio between the equal cap weight and the market cap weight of the top 200 largest altcoins by market cap, which is at a four-year low.

According to Coutts, the ratio suggests that some altcoins are on the cusp of a bullish reversal.

“Structural issues of investing in the asset class aside, where we are today are levels where, in the past, you start to see high-quality altcoins start to recover.”

Turning to Bitcoin (BTC), Real Vision’s chief crypto analyst says that the Market Value to Realized Value (MVRV), a metric used to assess the average profitability of coins in circulation, is suggesting that Bitcoin reached a cycle peak in the fourth quarter of 2024 and that “we should brace for the bear market.”

According to Coutts, various factors could determine whether Bitcoin stays bearish or resumes an uptrend.

“Firstly, every cycle/regime is different. This time, we have a US administration hellbent on closing the [federal budget] deficit – that is creating more uncertainty and will impact dynamics going forward.

But is China/Europe better off or worse off today versus four to six years ago? They will likely need to do more this time and fill the void if the U.S. Treasury/Federal Reserve is more constrained.”

The Real Vision chief crypto analyst says that while the MVRV metric suggests Bitcoin has already reached the current cycle’s peak, a lot will depend on global liquidity conditions. According to Coutts, Bitcoin could enjoy more upside if the global liquidity improves but could be primed for a downward trajectory if the liquidity stays constrained or falls further.

Generated Image: Midjourney