Solana, Cardano, Polkadot – what a mega-alt makes a good holiday season trade

The year 2021 has been exceptionally good for the altcoin market, from the rise of Defi tokens to the growth of smart contract platforms, the rally of Metaverse tokens, and the rise of Layer-2 protocols.

Mega altcoins or large cap alts like Solana, Cardano, and Lunares saw high annual ROIs this year rebounding regardless at some point or another. Thus, gaining great social attention and retail momentum. However, this quite fruitful year (at least for some coins) had come to an end.

The aforementioned large-cap altcoins appeared to take a bearish turn. The festive bells had yet to ring for DOT, ADA, and SOL, as altcoins noted a sharp correction after BTC fell below the $ 50K level. So with these altcoins testing their lowest support levels, could this be a year-end opportunity to ‘buy the dip’?

Also, will these altcoins be a good investment for the festive season?

Where are the main winners?

At press time, the global crypto market capitalization stood at $ 2.12 trillion. Thus, it presents a decrease of more than 6% in just 24 hours. On December 14, Bitcoin took a trip to the $ 45.6K level as Solana posted weekly losses of 22.44%. While Polkadot fell 10% and Cardano 14.41% in the same period of time.

Cardano, after hitting an ATH of $ 3.01 in early September, started a downtrend. Also, it was testing the long-term support of $ 1.2, at the time of writing. Solana, for her part, has recovered for most of the year. Notably, it increased from $ 1.6 on Jan 1 to $ 154.80, at the time of writing.

However, SOL was also testing the lower support of $ 151 at press time. Polkadot, amid the hype from the parachain auctions, rallied by 390% from July to November, generating a new ATH of $ 55. But the DOT has also been in a downtrend and tested the lower support. from $ 25.9.

Well, these altcoins testing lower supports could lead to a bullish bounce, especially with the holiday season just around the corner. So does that make this a good “buy the dip” opportunity?

The future trajectory of prices

According to the November Crypto Compare report, ETH was the best performing asset of the largest cryptocurrencies, yielding 7.9% for the entire month. SOL followed with a yield of 2.8%. On the other hand, ADA presented -39.19% and DOT -43.96% ROI vs USD in the last month.

In particular, the volatility of the three altcoins had rebounded. Solana and Polakdot observed an annualized standard deviation of 1.04 and 1.08 of daily returns over a time window. While Cardano’s volatility was 0.98, it had seen a more pronounced rally since October. The ADA Sharpe Index scored -4.4 and made its way from the all-time low of -5.7

Source: Messari

DOT and SOL also had low Sharpe ratios, pointing to -5.79 and -4.5, at the time of writing. Nonetheless, short-term external catalysts, such as the parachain launch event for Polkadot, may help the price breakout if the altcoin changes the crucial bottom support.

For Solana, his more than 76% of tokens staked, reduces the circulating supply on exchanges further boosting the coin narrative. Additionally, in terms of development activity, Solana has led the way among large-cap crypto projects, beating Polkadot and Cardano’s daily github submission rates for the past month.

Fountain: Santiment

That said, all three altcoins were at crucial price levels at press time. A move above or below those levels could steer your way forward. The outlook looks brighter for DOT and SOL compared to ADA, on the price front. While they can make good holiday trades, the element of risk due to higher Sharpe ratios cannot be ignored.

This is a machine translation of our English version.