Get ready for the end of the 'alt-coin' bear market in cryptocurrency
- The crypto market has been on the decline since the beginning of 2018, but Fundstrat expects a rally in "alt-coins" is on the horizon.
- "We believe the alt-coin bear market is largely over," the firm said in a note out to clients Tuesday.
Good news for investors in the market for digital currencies. The bear market for alt-coins, or alternative currencies, is "largely over."
That's according to a group of analysts at Fundstrat, the Wall Street research firm led by noted bitcoin bull Tom Lee.
For the most part, smaller cryptocurrencies have been stuck in a rout since the beginning of 2018. In total, the market for digital coins has shed over $500 billion of its value from an all-time high above $800 billion at the beginning of the year.
Since then, Fundstrat has advised clients to stick with large-cap coins such as bitcoin and ether to weather the storm. Recently, Lee said bitcoin would retest its highs close to $20,000 set in December by July of 2018.
Now, it's telling clients to get ready for an alt-coin rally. Here's Fundstrat in a note out to clients on Tuesday:
"After a 75% decline in Alt-coins since 1/13/18, our alt-coin indicator ("% of alt-coins rising >200% in past 90D, or 3X) now sits at 3%, suggesting the bulk of the alt-coin retracement is done-in other words, we believe the alt-coin bear market is largely over."
Hold on, that doesn't mean the firm is advising crypto-lovers to dive head first into their favorite alts just yet.
"While the bulk of the decline is behind us, a bull market for alt-coins, however, is not necessarily underway," Fundstrat said.
According to the firm, alt-coins have historically gone through "purgatory periods" following a bear market, which have lasted as long as 231 days.
"Given this expected purgatory, we advise sticking with large-caps," the firm said.
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