Not all of the market’s alts have been able to benefit from the recent Bitcoin and Ethereum price increases. Solana and Serum are two obvious examples of such alternates.
Both Solana and Serum have had a bad week, losing 8% and 14% respectively in the last seven days. Both of these alts had big rallies immediately before this. Between the 14th of August and the 9th of September, Solana and Serum appreciated by approximately 440 percent and 140 percent, respectively.
Isn’t it true that the “higher-highs” phase of every market doesn’t endure indefinitely? As a result, such a consolidation was unavoidable.
Is the adjustment beneficial?
Yes, in a word. Short-term HODLers and long-term traders, on the other hand, have a few reasons to be concerned.
For starters, these two alts haven’t been able to provide investors with significant returns in exchange for the risk they’ve taken.
The status of the alts’ Sharpe Ratio, in fact, backed up the previous thesis. In the case of Solana, the value has dropped from 14.4 to -1.2 in just a month, while the figure for Serum has dropped from 7.8 to -1.9 in the same time frame.
When compared to mid-September levels, both of these tokens’ spot volumes dropped. Surprisingly, though, the Open Interest has been increasing.
These disparate figures simply indicate that speculators and short-sellers are profiting from the market’s bearishness.
At the time of writing, the funding rate for both alts remained negative [-0.026 percent to -0.0598 percent range] on nearly all exchanges, suggesting that the pessimistic attitude might last a little longer.
Despite falling prices and a pessimistic outlook, both alts’ market cap domination has been pretty amazing. At the time of writing, Solana had 2.18 percent of the worldwide market capitalization. Similarly, Serum’s dominance level was near to its maximum [0.05 percent].
Furthermore, on Serum’s DEX, the trade volume trend has been more slanted to the upward. Serum is a decentralised trading programme based on the Solana protocol. Serum has benefited from the great speed and cost effectiveness of transactions because to its deployment on SOL’s blockchain.
Transactions worth millions of dollars have been completed on the DEX recently, as seen in the graphic. The present levels are unmistakably greater than those recorded in May.
In general, this emphasises the rise in adoption, which is a positive indication.
Furthermore, in just a month, the connection between these two alts and Bitcoin and Ethereum has grown from 0.1 to over 0.6. This increase simply ensures that Solana and Serum will not be left out once the wider rally begins.
With the aforementioned conclusions in mind, it’s safe to say that nothing has really changed for these two alts. As a result, even if their short-term prospects appear shaky, their long-term prospects are most likely safe.