Is it time to invest in altcoins? Link analysis shows…

• Altcoins with market caps under $10 billion are showing signs of imminent buying opportunities.
• Chainlink (LINK) may be poised for recovery, indicated by increased large transaction activity.

The altcoin market has suffered a downturn in recent months. After reaching a peak market capitalization of $1.27 trillion in March, this segment of the cryptocurrency market has since declined by more than 8%, now valued at $1.061 trillion as of this writing .

This decline has been quite evident in every aspect of the altcoin market.

Small-cap crypto assets have significantly underperformed since then, according to Jamie Coutts, chief crypto analyst at RealVision Bitcoin [BTC] reached new heights earlier this year

In a detailed analysis shared on social platform

Jamie Coutts suggests that the recent dip could be a typical mid-cycle correction within the broader cryptocurrency market cycle, which historically opens up buying opportunities.

As the market begins to stabilize, these small- and mid-cap cryptocurrencies could represent valuable entry points for discerning investors. This outlook is vital as it sheds light on potential recovery trajectories, suggesting a silver lining after the market storm.

Analytical breakdown: sector trends and forecasts

Jamie Coutts, sharing data from crypto tracking service Bitformance indicates a stark contrast in performance between various crypto sectors.

Over the past three months, while the top 200 equal weight index – which assigns equal weight to cryptocurrencies regardless of market capitalization – has fallen by more than 30%, the market capitalization index has seen a smaller decline, highlighting the resilience of larger cryptocurrencies such as Bitcoin and Bitcoin. Ethereum.

Source: Jamie Coutts

In particular, Bitcoin and Ethereum [ETH] they showed declines of 11% and 5% respectively, demonstrating their stability relative to the broader market. Among sectors, Metaverse-related tokens and infrastructure projects were hit the hardest, with declines close to 44%.

This significant decline across various sectors highlights the vulnerability of specific altcoins in times of market stress, but also highlights the potential for recovery in a stabilizing market.

Coutts’ analysis delves further into the specifics of these sectors, providing a clear picture of the market situation and what the future may hold. He observed:

“If we are experiencing a regular mid-cycle correction, which I think is likely, then expect there to be some opportunities in mid- and small-caps once the market stabilizes.”

Case Study: Chainlink Market Position

To assess whether smaller altcoins, especially those with market capitalizations under $10 billion, are poised for a rally, it is helpful to look at a specific example from this category.

Chainlink The LINK token, with a market capitalization of just over $9 billion, serves as an ideal case study to explore the potential of an uptrend.

Chainlink is currently trading at $15.31, reflecting a 1.4% decline over the past 24 hours and a more substantial 12.4% decline over the past week.

This recession was mirrored in the number of active addresses, which dropped significantly from over 90,000 in March to less than 60,000 today.

Source: Glassnode

This reduction in active addresses typically indicates a lower level of user engagement, which can negatively impact the token’s price stability and growth prospects.

Additionally, open interest for LINK, which represents the total number of outstanding derivative contracts that have not settled, has seen a notable decrease by 40% in the last 24 hours.

Source: Coinglass

However, there is a silver lining with a modest increase of 0.52% over the same time frame. This mixed signal on open interest may suggest market uncertainty, but it also indicates some resilience among investors.

Despite these challenges, there is a glimmer of optimism. The number of large transactions involving LINK, particularly those exceeding $100,000, has increased significantly, from fewer than 90 at the start of the week to more than 200 on June 12.

Source: IntoTheBlock

Realistic or not, that’s it LINK market cap in BTC terms

This surge, as shown by IntoTheBlock datasuggests that despite the overall market crisis, larger investors, or “whales,” are actively accumulating LINK, potentially in anticipation of future price increases.

Furthermore, AMBCrypto has signaled a potentially bullish future for LINK, citing a Relative Strength Index (RSI) below 63, which traditionally indicates a strong uptrend is forming.

Source