The value of Binance's small altcoin contracts has basically hit rock bottom. The contract prices of many small altcoins are now very close to their liquidity premium value/counterparty liquidity value. This is mainly judged by two indicators: BTCDOMUSDT and ALLUSDT. BTCDOMUSDT keeps hitting new highs, indicating that BTC is becoming stronger relative to large altcoins, while large altcoins are still weaker than BTC. This is also very obvious from the charts: When BTC drops, ETH, BNB, SOL—these relatively solid large altcoins—are hitting even deeper new lows. Large altcoins are still in the process of deflating their bubbles. But ALLUSDT has stopped dropping. ALLUSDT is a composite index of Binance's USDT-margined contract market, and it uses an equal-weight logic, reflecting the state of the "average coin." Right now, BTC is still weak, BTCDOMUSDT is still hitting new highs, and large altcoins are still being sold off. But ALLUSDT hasn’t broken down further. In fact, this time when BTC hit a new low, ALLUSDT was even slightly higher than the corresponding level during BTC’s last sharp drop. This shows that the market has started to stratify. In the first half of the decline, the entire market was being sold off together. In the second half of the decline, the focus shifted to selling off mainstream coins and large altcoins. As for the small altcoin pool, because it had already dropped so much earlier, the average selling pressure has started to weaken. What’s more critical is that ALLUSDT will continue to include new coins. New coins usually come with listing premiums, FDV bubbles, unlock sell-offs, and market-making pullbacks. These new coins inherently add extra drag to ALLUSDT. Under such circumstances, if ALLUSDT can hold up and not follow BTC to new lows, it highlights one key point: The speculative residual value of small altcoins has already been crushed to near their shell value. Considering the potential liquidity from the U.S. stock market gateway and the increasing scarcity of new listings on Binance contracts, the shell value will likely rise further. Next post, we’ll talk more about how to find these shells.