Wed, 27 Apr 2022 19:00:49 +0000
Bitcoin’s decline in the last week of April has been felt around the market but altcoins have taken the biggest hit of all. More specifically, Small Cap altcoins have been on the receiving end of this decline. Even as the end of the month draws to a close, these altcoins have yet to get a reprieve from this decline. However, the month of May could prove to be better for these small market cap coins given that recoveries tend to come after the worst declines.
All of the indexes have had a bad month in April but the Small Cap Index has suffered the most of this. The index has surpassed the losses garnered by the other indexes this month by at least a 12% margin. The other three indexes which are considerably larger than this index have fared much better in this regard.
Related Reading | TA: Bitcoin Resumes Downtrend, Why Upsides Remain Capped
This Small Cap Index, coming out of a highly successful month of March, took a significant nosedive at the start of the month and has maintained that downtrend since then. By the end of April, the losses in this index have grown as high as -28% in this time. This is a normal phenomenon, however, as the Small Cap Index is known to perform very badly during poor market conditions. The performance seen by the index in the month of May had been an outlier.
Small cap index suffer losses | Source: Arcane Research
For the other indexes, some have fared better than others, although bitcoin did not come out on top this time. That title went to the Mid Cap Index which recorded the lowest losses for the month out of the four indexes with a -10% loss. The Bitcoin Index rolled in at second place with a -13% loss. The Large Cap Index was the worst performer of the three with a -16% loss. However, this number still puts it ahead of the Small Cap Index by a significant margin.
The performance of the smaller cap altcoins is no surprise given the state of the market. After recovering back into the greed territory back in March, it had plunged quite fast in April. For the past week, the Fear & Greed Index has mainly fluctuated between the fear and extreme fear territory.
Crypto market at $1.77 trillion cap | Source: Crypto Total Market Cap on TradingView.com
This negative sentiment among investors has translated into the lower prices that have been recorded in the market. Digital assets all across the space had dumped spectacularly during this time with no sign of a recovery in sight.
However, this does not mean that the digital assets are doomed for the short term. The month of May is historically a bullish month for the crypto market and if it stays true to form, then a large recovery in the price of bitcoin could see the prices of assets in the Small Cap Index rise very quickly.
Featured image from Yahoo!, charts from Arcane Research and TradingView.com