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Toncoin, which is one of the best-performing cryptocurrencies in 2024, has also been affected in recent months by the broad bearish market climate. The altcoin price appears to be recovering well after experiencing a sudden drop on Friday, October 26.
As of this writing, Toncoin is worth around $4.92, reflecting a roughly 3% rise in the past day. However, this one-day action had a minimal impact on the token’s performance on the weekly time frame. According to CoinGecko data, the price per ton fell by approximately 7% in the past week.
What does a low Sharpe ratio mean?
In a recent Quicktake post on the CryptoQuant platform, an analyst with the pseudonym Darkfost said He explained The importance of the “Sharpe Ratio” measure for the price of a cryptocurrency. According to a cryptocurrency expert, Toncoin’s Sharpe ratio has decreased in recent weeks, indicating a period of lower risk.
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The relevant measure here is the Sharpe ratio, which evaluates risk-adjusted investment returns. This indicator basically measures how much profit an investment offers per unit of risk (keeping in mind that risk is measured through volatility).
Typically, a higher Sharpe ratio indicates higher risk-adjusted performance. On the other hand, when this measure is in a downtrend, it means that the currency is in a “less risky zone” and profits are becoming less important.
According to Darkfost, volatility and risk appear to be decreasing for Toncoin, as its Sharpe ratio continues to decline. With altcoins showing low sensitivity to price fluctuations, they offer a more favorable balance of risk and return and a less risky market for investors.
A less volatile market condition may be ideal for Toncoin investors to accumulate tokens with less exposure to sudden price movements. However, the Quicktake analyst warned investors to treat the market with caution as the “low-risk zone” may not be completely safe.
DarkFost specifically advised investors to continue to be cautious of Bitcoin price movements, as the market tends to respond to volatility from the leading cryptocurrency.
Toncoin will overtake Ethereum in this metric before 2025
In a separate Quicktake post, one analyst said Expected Toncoin will overtake Ethereum in terms of adoption before the end of 2024. According to Marton, the number of TON holders, which currently stands at 112 million, is expected to surpass ETH holders by December 20, 2024.
This prediction is based on Toncoin’s recent growth spurt, which has seen the network gain an average of 500,000 new holders per day over the past month. According to Quicktake analyst, the number of TON holders could exceed the number of Ethereum (currently 137 million) if this trend continues.
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However, Martin pointed out that this forecast does not take into account the potential slowdown in TON’s growth rate and the continued growth of ETH holders. The analyst acknowledged that although these two factors are just two variables, they may affect the expected dates.
Featured image from Unsplash, chart from TradingView