Small Cap Altcoins Get Decimated in January Crypto Derisking
During the crypto carnage in January, it appears that small-capped altcoins have emerged as the losers as they aim to finish the month in the red at 35%.
Small Cap Altcoins Suffer Biggest Losses in January Massacre
According to the latest weekly report from mysterious investigationit seems that the smaller the coins, the greater their losses during the January carnage.
Based on the market capitalization of each cryptocurrency, all coins can be classified into different groups. These “Capitalization Weighted Indices” mainly comprise three divisions, the “Large Cap Index”, the “Mid Cap Index” and the “Small Cap Index”.
The chart below shows how all of these major altcoin indices performed in the month of January compared to Bitcoin:
Bitcoin appears to be the crypto that has lost the least this month | Source: Arcane Research Weekly Update – Week 3
As you can see in the chart above, all altcoin indices so far have seen double digits in the month of January.
While the other indices posted returns in the negative 20s, the small cap index was even deeper in the red, losing around 35%, making the index the clear loser for the month.
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Following the small-cap index are the mid-cap and large-cap cryptos, both of which are approaching the end of the month with a 28% loss.
Bitcoin has been the “winner” this month as its value has fallen slightly less over the month, currently at -26%.
BTC’s dominance has also surged in the past week, surpassing 40% for the first time since November last year.
The table below shows how the market cap share of the top cryptos has changed over the past seven days.
BTC’s dominance is up more than 2% in the past week | Source: Arcane Research Weekly Update – Week 3
The report suggests that with altcoins losing some of their share of the overall crypto market to Bitcoin, it seems like the altcoin season is finally coming to an end.
Related literature | Market May Suffer, But Bitcoin And Ethereum Will Retire Stronger, Bloomberg Analyst
At the time of writing, Bitcoin’s price is hovering around $37.9k, down 10% over the past seven days. The crypto has fallen 25% in value in the past month.
The chart below shows the trend in the price of BTC over the past five days.
The price of BTC seems to have recovered somewhat in recent days | Source: BTCUSD on TradingView
After crashing to $33k, Bitcoin price has bounced back in the past two days with a sharp upward trend towards $38k.
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research