As Bitcoin Up over 16% in the past week, with a market cap of a solid $ 1.04 trillion, it really seemed like bitcoin season had started. However, alongside modest BTC wins, some altcoins looked pretty bland.

Additionally, some of the top performing coins of the past month also appeared to be struggling to keep up with the market. Cardano, Solana, and Algorand were among the top smart contract platforms that looked a bit boring after a euphoric smart contract season back in September.

Smart contract season

Solana, Cardano, and even Algorand, in particular, had rallied in August and September, even as BTC and ETH consolidated. Solana posted a new ATH of $ 215.18 on September 8, while ADA rose to its ATH of $ 3.10 on September 2, and Algorand posted a new two-year ATH of $ 2.57 post-2019 on last month’s 13th.

During this time, the three alts achieved high long and short term ROIs supported by high trading volumes while being carried by the euphoric market sentiment.

Price of ADA, SOL and ALGO compared to BTC | Source: Sanbase

But that wasn’t all, the general market rebound and NFT boom played a big role in the rally. Apart from that, the ecosystem-centric developments of the platforms and the hype of the community favored their rallies.

For example, ADA’s ATH was fueled in part by the hype surrounding the release date of the network’s smart contract. While ADA created an ATH before it was released, its value fell shortly thereafter and didn’t gain much momentum after its September 12 release.

However, at the time of writing, all three altcoins had negative ROIs for a day, week, and month. But what exactly led to it?

Always riskier?

One worrying trend that the three alts shared in addition to consolidating prices was the sizeable decline in their Sharpe ratio. In fact, the Cardano and Solana Sharpe ratios fluctuated in negative territory. Solana’s Sharpe ratio has been in decline since the ATH was set on Sept. 8, and was -1.06 at the time of writing.

Source: Messari

Cardano’s Sharpe Ratio hit an all-time low of -3.55 on Oct 4th but has been in an uptrend since then. On the flip side, Algorand’s Sharpe ratio held up surprisingly well, trading at 3.19.

Additionally, the annualized standard deviation of daily returns (volatility) for both Solana and ADA has seen a steady downtrend, while that of Algo has fallen nearly 40% over the past day.

Notably, the three altcoins have shown independently-driven development and an overall distancing from the larger market when it comes to rallies over the past two months.

Now that BTC is rebounding, these alts seem to be afraid of making a profit. Additionally, given their circulating market cap, which has held up well despite the consolidation in prices, it is possible that they are just waiting for the larger market to consolidate to take their steps.


Please enter your comment!
Please enter your name here