Toncoin, which is one of the best-performing cryptocurrencies in 2024, has also felt the impact of the widespread bearish market climate in recent months. The altcoin price appears to be recovering nicely after its keen decline on Friday, October 26.

At the time of writing, Toncoin is trading at around $4.92, reflecting an augment of almost 3% over the last day. However, this one-day action had minimal impact on the token’s performance on the weekly time frame. According to CoinGecko data, the price of TON has fallen by almost 7% over the past week.

What does a decreasing Sharpe ratio mean?

In a recent Quicktake post on the CryptoQuant platform, an analyst nicknamed Darkfost explained the importance of the “Sharpe Ratio” metric for the cryptocurrency price. According to a cryptocurrency expert, Toncoin’s Sharpe Ratio has been failing in recent weeks, signaling a period of reduced risk.

The relevant measure here is the Sharpe ratio, which assesses the risk-adjusted return on an investment. This ratio essentially measures how much return an investment offers per unit of risk (given that risk is quantified by volatility).

Typically, an increasing Sharpe ratio signals higher risk-adjusted performance. On the other hand, when this indicator shows a downward trend, it means that the coin is in the “lower risk zone” and the profits become less significant.

According to Darkfost, both volatility and risk appear to be decreasing for Toncoin as its Sharpe Ratio continues to decline. Because altcoins exhibit reduced sensitivity to price fluctuations, they offer investors a more favorable risk-return balance and a less risky market.

Less volatile market conditions may be ideal for Toncoin investors to accumulate tokens with less exposure to sudden price changes. However, the Quicktake analyst warned investors to approach the market with caution as the “lower risk zone” may not be completely safe and sound.

Darkfost specifically advised investors to continue to pay attention to Bitcoin price movements as the market tends to react to fluctuations in the leading cryptocurrency.

Toncoin will overtake Ethereum in this respect before 2025

In a separate Quicktake post, an analyst did just that predicted Toncoin will overtake Ethereum in adoption by the end of 2024. The number of TON holders, currently at 112 million, is expected to surpass ETH holders by December 20, 2024, according to Maartunn.

This forecast is based on Toncoin’s recent explosive growth, which has seen the network gain an average of 500,000 novel holders per day over the past month. According to analyst Quicktake, the number of TON holders could exceed Ethereum’s (currently 137 million) if this trend continues.

However, Maartunn noted that this forecast does not take into account the potential slowdown in TON growth rates and the continued augment in the number of ETH holders. The analyst admitted that although these two factors are only variables, they can still affect the forecast dates.

Featured image from Unsplash, chart from TradingView