Hello and welcome to the first edition of Sapho Report.

You will find a comprehensive financial analysis of what is happening in the subnet market.

Let’s dive in.

The Sum of Alpha Prices gives us a quick snapshot of the market’s overall mood.

August extended the decline that started in April, with prices dropping from 1.17 on August 2nd to 1.04 on August 31st. A fall of 11.1%.

But September seems to have surprises in store for us. The market bounced back from the 1.02 level, prices jumped 3.92% to 1.06.

Late August saw more TAOs moving to the Root, a sign that investors were getting nervous about staying in subnets. This was proof that investors were afraid to invest or remain in the subnet market.

However, since the beginning of September, TAOs have begun leaving Root in favor of subnets, which may have pushed the recent market increase.

Let's hope this is just the beginning of a strong upward trend. Whatever happens, we will keep you informed.

When we look at the subnet market through the big indexes, the last weeks have been calm, with everything still broadly correlated.

We use Mentat Minds indexes. Details on calculation are on this page. Mentat 5 and Mentat 15 cover the leaders, and Mentat 70 gives the wide picture of the whole subnet market.

We can easily observe this in the movement between August 28 and August 31. Mentat 5 gained +11.6%, Mentat 15 +9.7%, and Mentat 70 +9.5%.

Since the beginning of September, the indices have performed rather well, with Mentat 15 leading the way with +10.7%. Mentat 5 is up 8.3%, while Mentat 70, which represents the market, is up only 6.3%.

If the bottom of the subnets is established, Mentat 15 is likely to be the best performing index in the coming weeks. It could then benefit from the explosion of new subnets.

On the other hand, it is possible that the market will not show signs of strength. In that case, Mentat 5 will need to be monitored. This index has historically been the most resilient.

In terms of team-related strategies, Macrocosmos is experiencing a prolonged downturn with no signs of recovery (-23.5% since August 20).

Conversely, Rayon Labs has risen 9.3% between August 28 and September 8., benefitting from the small uptrend.

It should be noted that SN19 - Nineteen has been removed from the Rayon Labs strategy since September 3, and taken over by Taostats.

From a technical standpoint, Ridges is experiencing very positive momentum. Since late June, prices have surged over 1,740% before hitting resistance around 0.09.

It seems that this peak will be tested again in the coming days, which will be a very important area to watch: if rejected, a double top will have been formed. This would suggest a change in trend, making the subnet bearish on the charts.

Breaking this resistance would push Ridges to new all-time highs, with no obvious obstacles above.

Ridges (subnet 62) is specialized in automating software development through autonomous AI agents capable of augmenting or replacing human programmers.

The subnet currently ranks 2nd, with a market cap of $69.9 millions, a volume of $7.9 millions in the last 24 hours, making it the 1st most traded token.

Ridges clearly stands out, with trading volume and market cap showing strong investor interest.

The three largest wallets hold 6.94%, 2.87%, and 2.59% of the supply (12.33%), respectively.

These figures are rather low, it is not uncommon to see the three largest wallets hold more than 17% of the total supply. This is a good proof that token distribution is not centralized.

The largest wallet only buys and keeps adding tokens—it hasn't sold any. Over the last seven days, it has purchased 1,200 TAO from Ridges.

The ADR (Alpha-to-Distribution Ratio) in Bittensor measures how many Alphas are actually available for sale in the pool compared to all existing Alphas.

When the ADR is high (above 1), it means that there are many Alphas among users, but very few can be traded in the liquidity pool. This poses a problem because if many people want to sell at the same time, there is not enough TAO (liquidity) for everyone. in the end, the price quickly collapses, and most people cannot sell without losing a lot of value.

For Ridges, the ADR is 5, so there is a high risk in the event of massive sales.

Please note: a high ADR does not necessarily mean that the price will fall rapidly in the coming days. If buying pressure continues, the price will continue to rise. It only means that the subnet is under pressure if certain large portfolios decide to sell.

Ridges is experiencing tremendous momentum and is currently Bittensor's star subnet. Technically, it will be necessary to closely monitor future movements to determine its bias.

On the other hand, the threat of a high ADR is weighing on the network. It’s an important indicator to watch, as it could play a major role in the future.

Thank you for reading this newsletter. If you are interested in the subnet market, please feel free to click on the following link.

Disclaimer: This newsletter does not constitute investment advice. It is a tool designed to help you understand the Bittensor subnet market. Always do your own research before investing.