The recent performance of the Russell 2000 Index is worth the attention of crypto investors. This week, the index representing US small-cap stocks hit a new all-time high again, and its weekly closing price also set a record. Why is this important for the crypto world?

Simply put, small-cap stocks are like a barometer of risk appetite. When investors are willing to take on more risk and seek higher returns, funds flow into small-cap stocks; when panic sets in, these funds quickly retreat into large-cap stocks or cash to hedge risks. Now that the Russell 2000 has broken through its historical high, it indicates that overall market risk appetite is heating up.

In comparison, the situation of TOTAL3 (the total market cap indicator of major altcoins) is quite different. After a strong surge at the end of 2024, it has been exploring below the resistance level this year, remaining in a sideways accumulation phase without breaking through.

Here's an interesting logic: the Russell index has already hit a new high, while altcoins are still below a critical level — which happens to be the position just before the Russell index broke out initially. History often repeats itself.

The true significance of the Russell index lies in its reflection of long-term risk appetite, not short-term speculation. As long as this attitude persists, capital flow usually expands from the stock market into more aggressive territories — the high-risk, high-reward sector of the crypto market. By then, a breakout for altcoins may not be far off.